Venture capital (or VC) is what almost every novice entrepreneur needs. But what exactly is it? Why are investors taking this risk at all? And who are these venture capitalists? 

significance venture capital

Meaning venture capital

The Dutch name for venture capital is venture capital. It is also known as Aunt Agaath loan. Venture capital is money that investors in a start-up company (often a startup) stiches.

Banks and large investors are hesitant to put money into a start-up company. That's why venture capital is an important way to raise money if you're a startup entrepreneur, especially in the startup scene.

Why should you invest venture capital?

Venture capital investors are also known as venture capitalists, or venture capitalists. They are confident in the future of the new company. By putting money into it, they offer the startup the opportunity to grow. Because it is a start-up company, there is a considerable risk involved. 

Venture capitalists naturally get something in return for taking this risk. If the company succeeds, the return is high and they receive a multiple of their initial investment. 

Venture capitalists mainly invest in companies with a particularly high growth potential. So when they hit, they really hit the bull's eye. 

Who invests venture capital? 

First of all, the kind of VC you can get depends on the phase your company is in. In the initial phase you do not have a significant turnover: then you really have to have it from business angels

Business angels are entrepreneurs or former entrepreneurs who want to help starting entrepreneurs with their money and knowledge. Their investment is under a million, on average in 2017 about 25,000 euros. Their money is important, but above all their knowledge and network are invaluable. 

The bigger your company gets, the more you can ask from venture capitalists. You grow from private venture capitalists to professional, corporate venture investors. At that moment you can raise tens of millions.

Below is an infographic showing the landscape of venture capitalists in the Netherlands, from the initial phase (crowdfunding) to the final financing rounds (strategic VCs).

Tech venture capital infographic