© 2012 McGraw-Hill Ryerson LimitedChapter  Venture capital is money invested to finance a new firm  Venture capitalists are investors who are prepared to back an untried company in return for a share of the profits  An angel investor is a wealthy individual who invests in early- stage ventures  Venture capitalists know that the success of a business depends on the efforts its owner-managers put in  Typically, restrictions are placed on the management and venture capitalists advance the funding to the firm in stages, rather than all upfront  Venture Capital Companies – companies that provide capital to new innovative companies LO1

 Types of Venture Capital Funds ◦ Private independent firms ◦ Labour-sponsored funds ◦ Corporate venture capital funds ◦ Government run funds ◦ Institutional funds © 2012 McGraw-Hill Ryerson LimitedChapter 15-2 LO1

 Stages of Development ◦ Seed stage ◦ Start-up stage ◦ Expansion stage ◦ Acquisition/buyout stage © 2012 McGraw-Hill Ryerson LimitedChapter 15-3 LO1

Venture Capital investment activity by sector © 2012 McGraw-Hill Ryerson LimitedChapter 15-4 LO1

 Venture capital exits  Angel investing  Financing under the Canada Small Business Financing Act  Business Development Bank of Canada  Regional and provincial Lending programs © 2012 McGraw-Hill Ryerson LimitedChapter 15-5 LO1