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Investment

Venture capital (VC)

[in German also ‘Wagniskapital’] equity that specialised funds provide to young companies with high growth potential. The fund receives shares, usually a minority shareholding, as well as special rights in the shareholders’ agreement, and usually aims for an exit.

In practice

VCs assume that most of their investments will fail and that a few will carry everything. They therefore expect a sale within a few years and put in place a set of contracts that secures this path: term sheet, investment agreement, shareholders’ agreement, amendment of the articles of association and capital increase. For a company that wants to grow steadily and distribute profits, VC is often not the right form of funding. VC funds are built for rapid growth and a sale.

Term 42 of 44 · As at 9 September 2026

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