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Doing Business Guide.
Venture Capitalists
Venture capitalists are risk takers and professional opportunity-seekers. Venture capitalists usually specialize in certain industries, and prefer newer companies that have demonstrated high growth potential; such companies usually offer higher-than-average profits to their shareholders. Venture capitalists' investments are sometimes made through businesses specializing in acting as "matchmakers." Generally venture capitalists do not invest sums of money in smaller projects, retail and service businesses.
As risk takers, venture capitalists are entitled to participate in the management of the business. If the company does not perform, they may become increasingly active in the decision making process.
Venture capitalists also require an exit strategy to be included in the company's business plan. This minimizes risk to the investor, providing a way out if there is a strong indicator that the business will fail to reach its profitability goals.