Introduction
A venture capital is a financial intermediary whereby it takes funds from investor and makes investments in equities especially in portfolio companies. Normally, they are structured as limited partnerships with the capitalists becoming the general partners of the fund. The investor acts as the limited partner. The venture capitals have five main traits: they only invest their funds in private corporations, they act as financial intermediaries, they monitor the companies they invest in, and funds are used for the company’s internal growth. Normally, the venture capitalists are involved in investing, monitoring and exiting (Metrick, 2007).
An investment starts ...