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Many people invest in stocks  based on the news reported on television and newspapers.  However, this news should be taken with a pinch of salt , since  many of the reporters and analysts have their own hidden agenda  and are on the hidden payroll of the companies they promote.

Many corporate houses fund small internet startups to control the online media coverage.  For example A***  covers the online media in India and often the comments section is more interesting than the actual news story.  W** is a big player online and offline, and their loss for the last quarter was more than 20 crores.  They have picked up a stake in A**

While coverage of other internet companies included a lot of negative comments , there was not even a single comment for this news story. Obviously censorship at work!

Some of  the services offered by incubators include

1. Administrative support and arranging for office, laboratory space

2. Technical support

3. Business networking and management guidance

4. Assistance in preparing a business plan

5. Help in finding finance

The incubator may be funded privately or publicly.  Most private incubator either have an equity stake in the businesses they incubate or charge a flat fee for the services they provide. Public incubators are funded by the government , since new businesses help in growth of  the economy.

Venture capital is an investment made by outside investors in a new high growth business. The investors usually are given an equity stake in a business . The business is usually a high risk business which will find it difficult to get funds through conventional means like bank loans or the capital markets. However, the returns on a successful investment can be many times the returns on a conventional business.

Venture capital firms have general partners who make the investment decisions , select the businesses that will be funded by the firm. They usually have some background or experience in the businesses which are usually funded by the venture capital firm. The partners are usually involved in the management of the companies they fund.

The investors in the venture capital firm are limited partners. High net worth individuals and  financial institutions with large amount of  funds like pension funds, university endowments , insurance companies are investors in venture capital funds.

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