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Venture capital
Practical Law ANZ Glossary w-013-2160 (Approx. 2 pages)
Glossary
Venture capital
A type of private equity specialising in investments in start-up companies. Venture capital funds usually provide investment capital, industry connections, and operational and strategic guidance to start-ups throughout their rapid stages of growth. Venture capital funds are often established as limited partnerships. The goal of venture capital investors is to eventually exit each investment through an initial public offering or private sale of a portfolio company at a substantial profit.
While Australian venture capital funds have typically been established as unit trusts, the Australian government has a number of venture capital programs that facilitate a limited partnership structure similar to that used in other jurisdictions, including:
- Early Stage Venture Capital Limited Partnerships (known as ESVCLPs), for fund managers planning to raise an early stage venture capital fund of at least $10 million and not more than $200 million.
- Venture Capital Limited Partnerships (known as VCLPs), for fund managers planning to raise a venture capital fund of at least $10 million for investing in Australian businesses with assets of up to $250 million.
For more information about the Australian government's venture capital assistance programs, see www.business.gov.au/assistance/venture-capital.