VC (Venture Capital)
A form of private equity financing provided to high-potential startups and growth companies in exchange for equity.
Definition
Venture Capital is a type of investment where professional investors provide funding to startups and early-stage companies with strong growth potential. VCs typically invest in exchange for equity ownership and actively support companies through mentorship, strategic guidance, and network access.
How It Works
Typical Process:
- • Pitch and due diligence
- • Term sheet negotiation
- • Investment in exchange for equity
- • Ongoing support and guidance
- • Exit through acquisition or IPO
Real-World Example
Startup Example: A SaaS company receives $5M Series A from a VC firm for 20% equity
The VC provides not just capital but also strategic advice, board representation, and access to their network of customers and partners.