Risk capital

Updated: Aug 20, 2021

Long-term funds invested in enterprises particularly subject to risk, as new ventures. Sometimes used as a synonym for equity capital, it is also used instead of the term venture capital, a somewhat more precise term meaning capital provided for a new business undertaking by persons other than the proprietors. Neither term is unambiguous, since all capital except that secured by fixed assets is at risk, end even extensions to exisiting business may be described accurately as a new venture. Venture capital is provided by private investors and by institutions such as merchant banks. There are also a number of specialized venture capital institutions, such as Industrial and Commercial Finance Corporation, which at present is commpnly known as 3i.

Reference: The Penguin Dictionary of Economics, 3rd edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.