This is the early stage financing of relatively small, rapidly growing companies. Changes in capital gains laws in the late lo’s and early SO’s gave rise to increased interest in the financing of these high risk, high potential return investments.

Hundreds of millions of dollars in hinds were raised to take advantage of new opportunities, particularly in high technology companies.

Many investment banks joined in raising hinds for these ventures, raising capital from both outside and inside the firm.

Investors began to see the fruits of many of these investments in 1983 and early 1984 when hundreds of these companies went public.

However this new issue market dried-up dramatically in 1984 and 1985 as stock market Valuations of initial public offerings declined substantially.

The computer industry shake-out illustrated that the projected financial results of many of these new ventures would not be realized for years to come, if ever the operational problems facing many of the companies still in venture fund portfolios, has forced venture capitalists to trim their hind raising and investing activities as well as their hiring.

It is becoming increasingly difficult for new ventures to find funding at this time. Like wise it is increasingly difficult to find venture capital jobs unless one has 3.5 years prior work experience.

There are in fact some jobs available inside investment bank venture capital departments. Many firms maintain a venture group, either to provide an advisory service, as a conduit to raise funds, or as an actual principal investor. However each firm has a different orientation, so few generalizations exist.

Venture groups often adopt different investment strategies. Some groups specialize in early stage business developments such as startups and seed financings while others prefer bridge financings.

Venture capitalists, in addition to providing funding, will provide management assistance in such areas as planning, personnel development, marketing, supplier relationships, and future financing requirements.

Venture groups may have board representation and help monitor ongoing operations, serving as sounding boards for problem resolution.

The newest member to the venture capital staff may find his or her time filled primarily with business plan screening. However, as more portfolio companies begin to experience significant operating and or marketing problems, the associate is brought more into the financial analysis problem solving aspect of the business.

Venture capital groups tend to be relatively small, so competition for positions is intense.

Many Wall Street investment banks do not recruit new MBA’s but look for people with corporate experience. Although exceptions to the rule do exist.

However, the venture business is a highly challenging one both inside and outside the investment banking community.

It is worth the search for those who have technical or industry backgrounds and who love watching the growth of ideas and management teams turn into fast growing independent companies.