VENTURE NOUN (BUSINESS WORLD)

In business jargon, enterprise that involves a substantial degree of risk or speculation, particularly the financing of small new businesses. Used especially in compounds: venture arbitrage, risk arbitrage; the activity of an arb; venture buyout, a buyout financed by risk capital; venture capital, risk capital; money that is put up for speculative investment; venture capitalism, the system or practice of investment based on risk capital, especially in new and innovative high-capital projects; the activity of a venture capitalist. Etymology: A business or enterprise that has a substantial risk of loss as well as gain has been known as a venture since the sixteenth century; the compounds defined here extend that concrete sense into something more abstract: the whole practice of founding business on risk and speculation. History and Usage: The idea of venture capital is not at all new--the term has been used since the forties--but the whole area of venture capitalism grew and developed in a new way in the US during the sixties and seventies and the UK during the early eighties, giving rise to new uses for venture in compounds. The main reasons for the change were the growth of risk arbitrage (for history, see under arb) and the official encouragement of small businesses (see enterprise culture) which took place at this time. For the first time, venture capitalism became a profession in its own right, with individuals and institutions which specialized in it alone; this happened first in the US and was mirrored in the UK and Australia a decade or so later. Organizations providing venture capital were seen as the foundation on which business growth could be built, since it was these organizations that funded the small firms trying to market the results of the technological revolution. A shoeshine boy had been working the crowd near their table...'This is venture capitalism, Warren. Be supportive.' William Garner Rats' Alley (1984), p. 146 'Venture capitalism is basically placing equity-oriented capital in businesses that have prospects for high and rapid capital expansion,' explained the businesswoman. Chicago Tribune 28 Oct. 1985, p. 20 Following the MBO has come, for example, the venture buyout and the buy-in. Daily Telegraph 30 Oct. 1989, Management Buyouts Supplement, p. vi The wider issues that are generally ignored in the brutal world of town planners and venture capitalists. Vogue Sept. 1990, p. 376