Risk capital is long-term investment into an enterprise’s unlisted equity or provision of equity related loan with the purpose of supporting its rapid growth and development.
This type of investment conceptually differs from raising finance in a form of an ordinary loan. If you get an ordinary loan then you have an obligation to repay the principal and accrued interests irrespective of your success or failure, so in this case the lender is not the one who shares your repayment risk.
Risk capital investor’s approach is absolutely different, because his or her return is heavily dependent on the prosperity and profitability of your enterprise, taking the same risk as other shareholders.
