Venture capital (VC) is a form of private equity financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. It’s not just a mere injection of funds into a new company – it’s also a form of technical and managerial expertise. VC is typically allocated to small companies with exceptional growth potential or companies that have grown quickly and appear poised to continue expanding.
The venture capital business is a 100% game of outliers- it’s extreme exceptions.
Marc Andreessen
In Simpler Terms
Think of venture capital as the fuel that powers the engine of a startup. A venture capitalist is like a co-pilot who not only provides fuel but also brings navigation tools and maps (industry expertise and connections). They don’t just invest money. They also invest their experience and network to guide the startup towards success. While venture capital can be a game-changer for startups, it also means sharing control. Venture capitalists often get a say in company decisions and a portion of the equity.
