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Venture capital

Venture capital

Venture capital is capital invested in high-risk, high-growth companies, often unlisted and early-stage.

What is venture capital?

Venture capital (Swedish: riskkapital) is capital invested in companies with high risk and high growth potential, usually unlisted companies at an early stage. The investor normally receives shares in return. Venture capital comes, for example, from venture capital firms and business angels.

 

Venture capital and the ownership picture

An investment is often made through a new share issue and governed by an investment agreement and a shareholders' agreement. Each round changes the ownership stakes, so an up-to-date cap table and share ledger are important ahead of the next capital raising.

Learn more about capital raising
Henrik Kristensen, NVR
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Related terms

Business angel

A business angel is a private individual who invests their own capital in a company at an early stage.

Capital raising

Capital raising is when a company brings in new capital, for example through a new share issue.

Investment agreement

An investment agreement governs the terms when an investor puts capital into a company.

Dilution

Dilution means existing owners' stake in the company decreases when new shares are issued.