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Venture Capital Firms

Venture-capital firms ("VCs") typically raise large investment funds from the financial community and use that money to purchase ownership (equity) in growing businesses. To help nurture and guide their client companies, members of these VC companies often serve as investment advisors to their companies, and sometimes even serve on their Boards of Directors.

Investors in venture capital funds are known as limited partners. This group consists of both high-net worth individuals and institutions with large amounts of available capital, such as state and private pension funds, university financial endowments, foundations, insurance companies, and pooled investment vehicles known as funds or mutual funds.

Within the venture capital industry, the general partners and other investment professionals of venture firms are often referred to as "venture capitalists" or "VCs". These venture partners are expected to source potential investment opportunities ("bring in deals") and are typically compensated only for those deals with which they are involved. The best VC firms have entreprenurial experts in particular domains, who perform due diligence on potential deals. The level of due diligence performed by VC firms is typically much deeper than what is done by angel investors, in keeping with the larger sums they subsequently invest in each deal.