Role of Venture Capital in Economic Development

The categories of venture that capitalists might invest will include:

a) Business start-ups - Whenever a business has been set up via someone who has previously put money and time into getting it started, the group may be willing to provide finance to enable it to get off the ground.  Along with start-ups, venture capital often prefers to be one of some financial institutions placing in venture capital.

b) Business development - The group may be willing to offers development capital for a company that wants to invest in new markets or new products or to make a business acquisition, and so that too needs a major capital injection.

c) Management buyout - A management buyout is the purchase of a business of all or parts from its owners through its managers.

d) Helping a company whereas one of its owners wants to appreciate all or part of his investment. The venture capital may be ready for buy few of the company's equity.