The Czech Private Equity and Venture Capital Association (CVCA) is a legal entity constituting a voluntary, nonprofit, free-standing, independent, nongovernmental trade association of legal entities. Its subject of business is to support the private equity and venture capital sector in the Czech Republic. The CVCA proposes measures both on a national as well as European level in collaboration with the European Private Equity and Venture Capital Association (EVCA).
Private equity and venture capital (PE/VC) are alternative sources of funding for innovative projects and companies with potential for rapid growth. In the Czech environment, venture capital is understood as medium- to long-term capital invested in the form of an equity stake in a company. The venture capital fund acquires a share in the company’s registered capital in exchange for the investment, and, in addition to funding, it also provides the firm with professional assistance (the principle of “smart money”). Most often, this assistance takes the form of financial and strategic support in developing the company. It varies for individual investments, however, depending upon what form the investor and enterprise agree. It may involve actively strengthening the team in the top management positions or a passive role as advisor in the financial area. The investor often enhances the company through its beneficial contacts in various business areas and in acquiring new customers.