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Venture Capital

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The Palgrave Encyclopedia of Strategic Management

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Abstract

The financing of knowledge-based innovative companies that pursue the creation of new products and services is very risky, and requires special skills and the use of sophisticated contracts. Venture capital firms are small partnerships of highly skilled investors with business and entrepreneurial experience. They raise money from institutional investors and use it to fund companies selected through a thorough screening process. Venture investors become actively involved with their companies to help them commercialize their products and services. They also exert tight control on entrepreneurs by using sophisticated contracts. Originating in the US, venture capital is now a global industry.

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Author information

Authors and Affiliations

  1. Department of Finance, Tilburg University, Tilburg, Netherlands

    Marco Da Rin

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  1. Marco Da Rin
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Correspondence to Marco Da Rin .

Editor information

Editors and Affiliations

  1. Stanford University , Stanford, California, USA

    Mie Augier

  2. Tusher Ctr Intellectual Capital, University of California Tusher Ctr Intellectual Capital, Berkeley, California, USA

    David J. Teece

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© 2016 The Author(s)

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Da Rin, M. (2016). Venture Capital. In: Augier, M., Teece, D. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-94848-2_680-1

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  • DOI: https://doi.org/10.1057/978-1-349-94848-2_680-1

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-94848-2

  • eBook Packages: Springer Reference Business and ManagementReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

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