What are venture capital funds?

venture capital and seed capital are very similar and often confused. The easiest way to differentiate them is to think of venture capital for the next stage of your business growth. Venture Capital Funds will generally be much larger than Seed Capital and so will be sought by larger businesses.

How venture capital funding works

When you seek venture capital you will approach a venture capital firm or a venture capitalist.

Venture capital firms

These firms have venture capital funds which they use to invest in businesses that they believe will give them a good return on their investment (ROI).

Unlike seed capital funds which tend to come directly from the pocket of an angel investor, venture capital funds come from a number of different places. The venture capital firm rarely uses its own money but instead will persuade other firms and individuals to invest in their fund.

Here are a couple of VC firms in the UK for you to take a look at:

London Venture Partners
Specifically investing in the games industry, if this is your thing then they are experts in the field and would be a good first firm to look at.

Connect Ventures
Focusing on product led businesses, they have mainly invested in mobile, internet and digital media businesses.

Venture capitalist

This will be an affluent individual or private company who is seeking to invest in start-up business. In some cases they will expect to work with your business as well as just invest funds, offering their experience and expertise to ensure the business success and so the success of their investment.

Applying for venture capital

Businesses can apply for venture capital in the same way that they would for seed capital. That is to say, creating a strong pitch which highlights the business purpose, proposed revenue streams and expected growth following investment.