Start Up Venture Capital
History
Start up venture capital was once the domain of wealthy individuals and families in the early 20th Century. There were notable families with riches that many start up businesses relied on to help gather up some start up capital for a business that showed some potential. In the United States, there were wealthy families such as the Rockerfellers, Warburg and the Vanderbilts who were noted for their investments in several industrial and private companies during the early 1900's. During this time, it was not yet known as venture capital but more commonly referred to as development capital.
It was not until after World War II that venture capital investments ceased to be a realm of wealthy families. Sometime in the 1940's, venture capital firms were set up in order to help and encourage the private sector to invest in businesses. The firms initially targeted returning GI's. These venture capital firms were the first of their kind in that they helped raised capital funds that did not come primarily from the wealthy families.
Technology And Venture Capital
In the subsequent years, venture capital firms focused more and more on investing in technology companies. It was a time when many technological breakthroughs in electronics, data processing and the medical field were made. The late 60's up towards the 70's saw many venture capital firms eyeing investments mainly in technology. It was also during this time that venture capital became almost synonymous with technology finance because of its perceived focus in terms of investments.
80's Hardships
The venture capital industry first saw its successes bear fruit during the 70's and the 80's when many start up technology businesses grew to become big companies. This led to many other capital firms providing start up funding to new businesses that showed high potential for growth. The growth of the venture capital market itself suffered as more and more players entered into the fray.
With many venture capital firms increasingly looking for the 'next big thing', the risks that they took to determine the potential of certain start ups for growth and success also increased. Many venture capital firms suddenly found themselves facing declining returns that didn't sit well with their expectations for some of the start ups they funded.
Along with the competition, occasional dips in the overall business climate also affected the returns for most of the venture capital firms. It also worsened during the stock market crash in 1987 where many IPO's collapsed and this led many of the venture capital firms to close shop.
90's Boom
The 90's saw a shake up in the venture capital industry that helped bring about much needed improvement. The boom came when the Internet began making waves and the dotcom boom started. This led to many start up venture capital firms providing funding to many of the online businesses trying to make their mark on the Web and this stretched until the year 2000 when the dotcom bubble finally burst.
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Startup Venture Capital Essentials: Business Plan Writing
Startup Venture Capital Essentials: Management Skills
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