Finance
What is Venture capital?
Venture capital (VC) is money invested in early-stage, high-growth startups in exchange for ownership (equity). Investors accept high risk — most startups fail — betting that a few big winners will more than make up for it.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains venture capital.
Key things to understand
- 1VCs fund risky young startups in exchange for equity.
- 2They expect most to fail and a few to return huge gains.
- 3Funding comes in 'rounds' (seed, Series A, B…) as the startup grows.
- 4VCs often add guidance, networks, and hiring help, not just money.
Frequently asked questions
- How does venture capital work?
- Investors buy equity in startups, aiming for a few to grow enormously and return far more than the losses on the rest.
- What is a funding round?
- A stage of raising money (seed, Series A, etc.) as a startup grows and needs more capital.
- How is VC different from a loan?
- A loan must be repaid with interest; VC buys ownership and is only 'repaid' if the company succeeds.