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Venture capital is basically money given to a new or developing business to help them to grow, with the aim that the businesses growth will make the investor money. The companies that require venture capital are usually not able to secure business or bank loans due to being either risky, or not sufficiently developed yet.

Most venture capital is given to risky new businesses by wealthy individuals, who usually buy into the company and gain a portion of control over decisions that the business makes. Often investors of this type are very rich already, and tend to specialize in owning parts of many other businesses.

There are also companies who specialize in investing in new businesses, and are usually involved heavily in assessing whether a business can develop and become profitable. How willing these businesses are to invest in a new business is often a good indicator of how successful the business will be in the coming years. Although this isn't always the case as some market conditions can not be accurately predicted.

Another type of investment group is when individuals come together from across the spectrum of people with a vested interest in the business. These are often called consortiums, and usually have a chair person rather than giving control to each investor. Although this type of investment group is more often associated with complete takeovers of ailing businesses, they do invest in new businesses as well.

Some venture capitalists are purely involved in investing in the business, and might not have any specialized knowledge in the actual market the new business is entering. However much more commonly, the venture capitalists tend to have a lot of experience and knowledge in the same area as the businesses that they invest in. In this respect they often bring their managerial expertise as well as being useful due to the fact that they often have connections in the relevant industries to help the business succeed.

Venture capitalist companies tend to invest in businesses for only a few years in order to make themselves profit. Each year the general partners of the venture capital business can expect to make 2% of their invested capital as a management fee. As well as this 20% of the invested companies profits are generally given to the overall management company of the venture capitalists. The remaining profit is usually shared out between the investors.

A good example of venture capital working is the well known TV show Dragons Den. In the show several

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