Comparison Terms
Venture Capital
Also Known As
VCVenture Capital Fund
Venture Capital (VC) is a form of private equity financing where investors provide capital to high-growth potential startups in exchange for equity ownership, typically expecting returns through eventual IPO or acquisition.
What is Venture Capital?
Venture capital is institutional investment in startups. VCs raise money from limited partners, invest it in startups, and seek returns when those startups are acquired or go public.
How VC Works
- Fundraise: VC raises fund from LPs
- Invest: Deploy capital into startups
- Support: Help companies grow (board seats, advice)
- Exit: Generate returns via IPO or acquisition
- Return: Distribute profits to LPs and GPs
VC Investment Stages
| Stage | Typical Check |
|---|---|
| Seed | $500K - $3M |
| Series A | $5M - $20M |
| Series B | $15M - $50M |
| Series C+ | $50M+ |
VC vs Venture Studio
| Aspect | VC | Venture Studio |
|---|---|---|
| Creates Companies | No | Yes |
| Equity Taken | 10-25% | 30-50% |
| Involvement | Board level | Operational |
| Stage Focus | Seed+ | Pre-idea to seed |
| Deal Volume | 20-40/year | 3-10/year |
When Studios Have Funds
Many venture studios also have VC funds to:
- Invest in their portfolio companies
- Provide follow-on capital
- Invest in external companies
Example Usage
“After raising from a venture studio, they brought in traditional VCs for their Series A.”