ECONOMICS

Detailed explanation-1: -Venture capital is a form of financing where capital is invested into a company, usually a startup or small business, in exchange for equity in the company.

Detailed explanation-2: -Startup capital may be provided by venture capitalists, angel investors, banks, or other financial institutions and is often a large sum of money that covers any or all of the company’s major initial costs such as inventory, licenses, office space, and product development.

Detailed explanation-3: -Equity share capital is called risk capital because equity shareholders are the last to receive returns in a company, that return is only possible if the business is making a profit. This makes it risky capital as the returns depend on the profits of the company.

Detailed explanation-4: -The most common example of capital risk is seed funding for a business. When a business starts up its operations, it requires a certain investment. This investment cannot always be supplied simply through loans from banks, but also requires investors who believe the business will make money.

Detailed explanation-5: -Capital investment is a broad term that can be defined in two distinct ways: An individual, a venture capital group or a financial institution may make a capital investment in a business. The money can be provided as a loan or a share of the profits down the road. In this sense of the word, capital means cash.