Venture Capital Firm

Definition of "Venture Capital Firm"

Referred to for investment on the basis of musharakah, a venture capital firm manages funds provided by investors and directs it to the most promising ventures in the form of equity. The firm provides financial and strategic assistance to the recipient company and actively participates in its management. The support continues until the venture materializes, at which stage an outside investor might be interested in owning the company, or it might be able to go public. Returns are then distributed back to the investors.