Venture Capital Law
Venture Capital, a high risk investment, is generally used for the financing of start-up businesses that have an increased growth potential. New biotechnology, information technology and manufacturing businesses are the most active industries in venture capital funding and rely on financing by offering company shares in exchange of cash investments. Laws regulating this industry are discussed in our Investment Law Guide.
Venture Capital Law - US
- ABA - Committee on Private Equity and Venture Capital
The Committee on Private Equity and Venture Capital focuses on issues facing U.S. and international lawyers who form and represent private equity and venture capital funds and those who advise entrepreneurs and companies seeking financing from those sources. The Committee addresses the regulatory, securities, corporate, tax, intellectual property, and other concerns of the private equity and venture capital communities, including with respect to both investments by funds and the formation of funds. The Committee provides a forum for exchanging views and information current and emerging issues and trends impacting private equity and venture capital funds and their investment transactions, portfolio companies and investors.
- New Markets Venture Capital Program
The New Markets Venture Capital Program final rule adds a new Part 108 to implement the New Markets Venture Capital Program Act of 2000 (“the Act”). The Act authorizes SBA to issue regulations necessary to implement the program. The regulations set forth the requirements for newly-formed venture capital companies to: qualify to become New Markets Venture Capital (“NMVC”) companies; to make developmental venture capital investments in smaller enterprises located in low-income geographic areas; provide operational assistance to enterprises receiving such investments; and allow existing Specialized Small Business Investment Companies to qualify for grants to provide operational assistance to smaller enterprises located in low-income geographic areas.
- NVCA Public Policy
NVCA is the leading public policy advocate for the venture capital industry. The Association works with all branches of government and the media in order to foster a better understanding of how venture capital positively impacts the U.S. economy and advocates for policies that encourage innovation, new business creation and entrepreneurship.
- Venture Capital - Definition
Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in "turn around" situations. Venture capital investments generally are relatively high risk investments, but may offer the potential for above average returns. A venture capitalist (VC) is a person who makes such investments. A venture capital fund is a pooled investment vehicle (often a partnership) that primarily invests the financial capital of third party investors in enterprises that are typically too risky for typical equity investors or bank loans.
Organizations Related to Venture Capital Law
- Community Development Venture Capital Alliance
CDVCA is the network for the rapidly growing field of community development venture capital (CDVC) investing. CDVC funds provide equity capital to businesses in underinvested markets, seeking market-rate financial returns, as well as the creation of good jobs, wealth, and entrepreneurial capacity.
- Dow Jones - Private Markets and Venture Capital
Dow Jones gives you a competitive edge with accurate, comprehensive news, research and analysis on the private capital markets.
- Entrepreneurship
Entrepreneurship.org features a vast array of content and resources to assist entrepreneurs, business mentors, policy makers, academics and investors through each phase of the entrepreneurial process. The content ranges from resources entrepreneurs need to launch a company to policies and research that has been conducted regarding entrepreneurship.
- National Venture Capital Association (NVCA)
The National Venture Capital Association (NVCA), comprised of more than 400 member firms, is the premier trade association that represents the U.S. venture capital industry. NVCA's mission is to foster greater understanding of the importance of venture capital to the U.S. economy, and support entrepreneurial activity and innovation. The NVCA represents the public policy interests of the venture capital community, strives to maintain high professional standards, provides reliable industry data, sponsors professional development, and facilitates interaction among its members.
- VC Task Force
VC Taskforce™ has built an organization that the venture community can give input and direction to and get immediate results that benefit both investors and their portfolio companies. We were established to provide a system of services including: business, legal and financial programs that provide real-time, strategic and tactical information addressing imminent concerns of venture capitalists and portfolio companies. VC Taskforce™ provides a forum for many types of investors: LPs, venture capital firms, institutional investors, PE and portfolio company management in which they can share ideas and information that will help them manage their businesses for maximum success.
Publications Related to Venture Capital Law
- SBA - Seed and Venture Capital Financing
Venture capital is typically provided to early-stage start up companies that have high growth potential in industries such as biotechnology, information technology and manufacturing. Venture capital investments are generally made as cash investments in exchange for shares in the company.
- US Venture Capital Sector
Venture capital in the US can be divided into 'professional' and 'angel' finance. 'Professional' venture capital is typically provided through venture capital funds, while 'angel' venture capital is more usually invested direct by one or a small number of private individuals. Generally, venture capital investors can be said to invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors. Venture capital is an important source of equity for start-up companies.
Articles on HG.org Related to Venture Capital Law
- Crowdfunding, Crowdinvesting, Kickstarter, and the JOBS ActIn 2012, the US federal government passed a bill called the JOBS act. Among its provisions was one allowing for small investments in exchange for equity in that company or project without having to go through the SEC or qualify as an investor. What is the difference between crowdinvesting and crowdfunding, what is Kickstarter, and how does it all work from a legal standpoint?
- JOBS Act: Initial Public Offering “On-Ramp”The JOBS Act, signed into law on April 5, 2012, is intended to stimulate job creation and economic growth by improving access to the capital markets for smaller companies. In an effort to facilitate capital-raising for private companies, the JOBS Act created a new class of issuer known as an “emerging growth company,” or an EGC.
- JOBS Act: Small Public Offerings – New Regulation A+On April 5, 2012, President Obama signed into law the “Jumpstart Our Business Startups Act” (JOBS Act). The JOBS Act is intended to facilitate the creation of new jobs by easing securities law burdens on capital-raising activities by smaller companies.
- JOBS Act: SEC Must Amend Reg D to Permit Advertising for Private Offerings to Accredited InvestorsThe Jumpstart Our Business Startups Act (JOBS Act) has made several important changes to federal securities laws. One of these changes has been to require the SEC to eliminate the restriction under Regulation D prohibiting general solicitation and advertising in connection with certain private offerings.
- JOBS Act Makes Major Revisions to Securities Laws; Eases Capital-Raising for Smaller CompaniesThe JOBS Act is intended to stimulate job creation and economic growth by improving access to the capital markets for emerging growth companies. The JOBS Act contains a number of provisions designed to ease capital-raising for private companies, including:
- How to Raise Money for Your CompanyFor many private and public companies raising funds is essential to get over the hump and on the road to revenues and eventual profits. There are several things companies can do to increase their chances of successfully raising money on favorable terms.
- Venture Capital Terms: A PrimerWhether you are a company looking to raise financing or a potential investor, make sure you understand the important concepts that you will invariably be confronted with in a venture capital transaction. Even if your business is not at the juncture of raising financing, understanding the key terms now will help you start to position the company for an eventual financing round down the road. This Article provides an overview of some of the important terms in a venture deal.
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