Capital infusion

Capital infusion

Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. In the context of venture capital, it can also refer to funds received from a venture capitalist to either get the firm started or to save it from failing due to lack of cash.

Capital Infusion

1. Within a firm, the provision of funds to a relatively unsuccessful division from the profits of another division. Management may infuse a division with capital if it believes that it will eventually become profitable.

2. Funds received from a venture capital firm. Capital infusion may help a start-up survive the first few months or years before it becomes profitable, or it may help a failing business maintain its operations as it restructures or reforms.