Finance glossary
Venture Capital
Definition
Funding for early-stage, high-growth startups in exchange for equity.
Venture capital backs young companies with strong growth potential that are too risky for banks, taking equity stakes in hopes of outsized returns when a startup is acquired or goes public. Most investments fail, so VCs rely on a few big winners to drive fund returns.
In a sentence
The startup raised venture capital, giving up equity for the cash to scale quickly.
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