What Are Venture Capitalists?
Venture capitalists are individuals, or groups, that invest in early funding rounds. Compared to angel investors, venture capitalists typically invest more money at a slightly later phase in a business. This type of investor expect you to show you have a solid business plan. A venture capitalist also wants to see a high return of profit.
Venture capitalists trade funding for securing equity capital, or a share in your company. They are betting that the share will be worth more within time and will wait to get a return on the investment.
Giving up that equity capital means giving up some ownership or say in the company. Venture capitalists may also want a steeper return on their investment than what the interest rate may be on a business loan. They may also require some influence over the company, such as a seat on the board.