Venture Capital Limited Partnership

Venture capital limited partnership is a limited partnership that invests in small businesses with high growth potential.

A venture capital limited partnership seeks out small businesses in markets with high potential for growth. A partnership is a business entity made up of one or more general partners. These partners pool their money together to invest in small businesses. Most of the investments they make are high-risk investments, but the potential for a greater return on investment is why they make these investments. Often times the venture capital limited partnership will become a percentage owner of the firm they are investing in. Sometimes the venture capital firm will invest using money they have been entrusted with from a large number of third-party investors.

Banks and other regular lending institutions may turn down a company because there is too much risk for them to loan money to them. That is when a venture capitalist will often jump in because their high-risk investment could bring a high return. The most common industry for venture capital firms to invest in is technology.


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