Venture capital (VC) is what private investors inject into a single business venture, usually a start-up or early-stage private company, whereas growth capital is typically invested in established, publicly-traded companies via the capital markets. Most venture capitalists are either private partnerships or corporations funded by private investment.
VC industry group the National Venture Capital Association (NVCA) claims that companies backed by venture capital now account for more than $2 trillion in GDP and over 10 million U.S. jobs. The NVCA represents almost 500 venture-capital firms in the U.S. and recently celebrated its 35th anniversary.
The NVCA describes most venture-capitalist firms as pools of private-equity capital organized as a limited partnership that invest in potentially high-growth young companies with a time horizon of five to seven years. Investors can include private individuals, trusts and institutional investors such as pension funds. Many also become involved in the management, planning and marketing of their new venture.