A venture capital (VC) fund invests money, its network and other resources in young companies that are in the early stages of business development. Many VC funds focus on specific industries or invest exclusively in a specific target region. VC funds typically invest equity capital and thereby take full entrepreneurial risk.
Unlike, for example, a family-run business with its own capital, a fund usually secures money mainly from external investors and invests it specifically in predetermined areas, sectors and companies. An equity fund does the same, although here the money is invested in listed companies, for example from the DAX.
VC funds are basically classified as private equity. Private equity means that the companies in which investments are made are not listed – i.e. publicly traded – but held privately, as are most GmbHs (limited companies).
A VC fund, like the Seed Fonds Aachen & Mönchengladbach, has investors who entrust part of their assets to an external manager – the fund management – to achieve a certain return. These investors are referred to as Limited Partners (LP). You can find our LPs here.