Venture Capitalists

Who are the Venture Capitalists

A venture capitalist (VC) is a private equity investor that provides capital to companies with high growth potential in exchange for an equity stake. A VC investment could involve funding startup ventures or supporting small companies that wish to expand but have no access to the equities markets.

Coincident with the 1983 passage of the SBIR enabling legislation, other legislative and business initiatives were underway - eg Bayh-Dole - similarly designed positively to impact overall climate for technology innovation. Critical among these were elements to support what became an important surge in Venture Capital activity. In crafting the original SBIR concept, we stressed that developed technology - funded through Phases I & II by participating federal agencies - sh/would transition to the use-condition of Phase III with non-SBIR support. To some extent, therefore one could argue that SBIR and VC 'have grown up' together. Certainly, from the very earliest days of SBIR a substantial percentage of Awardees have been in receipt of Venture Capital investment at some level.

Types of Venture Capital

The stages of VC investment are:
  • Pre-Seed: This is the earliest stage of business development when the founders try to turn an idea into a concrete business plan. They may enroll in a business accelerator to secure early funding and mentorship.
  • Seed Funding: This is the point where a new business seeks to launch its first product. Since there are no revenue streams yet, the company will need VCs to fund all of its operations.
  • Early-Stage Funding: Once a business has developed a product, it will need additional capital to ramp up production and sales before it can become self-funding. The business will then need one or more funding rounds, typically denoted incrementally as Series A, Series B, etc.