Rohan, a qualified certified entrepreneur, decided to start a company providing communications services. It was like a dream for him. For him it was a first time to manage a company so he had a fear of involving high risk. However he lacked the necessary funds to give shape to his idea. He knew that if he failed to get investment from public, his dream will not turn into reality. So, he made a detailed business plan and presented his idea to a company which is run by a group of professional investors. They were impressed by his business plan and decided to fund his start up in exchange for an equity stake in business. The source of finance used by Rohan is :

Venture capitalist

Obtaining venture capital is substantially different from raising debt or a loan from a lender. Lenders have a legal right to interest on a loan and repayment of the capital, irrespective of the success or failure of a business. But, a venture capital is invested in exchange for an equity stake in the business. Because of the strict requirements venture capitalists have for potential investments, entrepreneurs should seek funding from this source after a careful evaluation.