Explainer
Venture Capital
Investing in early-stage companies
Money from investors who back young, high-growth companies in exchange for ownership.
Venture capital firms raise money from institutions and wealthy individuals, then invest it in startups with the potential to grow very large.
Most venture investments fail or return little. A few big winners are expected to produce the bulk of the returns, which is why venture investors seek out companies that could become dominant in their field.
Beyond cash, venture investors often provide introductions, hiring help and board oversight.
Illustrative explainers. Figures in examples are hypothetical.