What is Venture Capital (VC)?
Venture capital (VC) is a form of private equity that provides financing to early-stage, high-growth companies in exchange for equity. VC funds raise capital from limited partners and invest across seed, Series A, and later rounds.
Venture capital funds invest in startups and emerging companies that have high growth potential but lack access to bank lending or public markets. In exchange for capital, VCs take equity stakes and actively support portfolio companies through board seats, introductions, and operational guidance.
VC fund managers (GPs) raise capital from institutional LPs such as university endowments, family offices, pension funds, and fund-of-funds. A typical VC fund has a 10-year life, a 3–5 year investment period, and charges a 2% management fee plus 20% carried interest.
Also known as: VC, venture fund