venture capital is something you hear about all the time in Tech but do you know what it is or how it works could you explain it to people at a party well if not we got you venture capital is money that is provided by investors to startups that have the potential to reshape markets and grow very fast the money deployed by a VC firm usually comes from institutional investors corporations or wealthy individuals looking to make some serious dop let's say Jane and briyan have a camera app that's getting a lot of customers and media attention
they know their little company could be balling one day but the banks are hesitant to lend them money because they think it's too risky but Marcus the successful VC looks at what Jane and Brian have done and thinks the benefits outweigh the risks he gets to know the two learns about their product reads the business plan and finds out how much they've done so far Marcus likes what he sees and decides to invest in Jane and Brian's company he does the same in varying amounts to other startups with similar potential because in the VC game
you need a backup plan about three out of every before startups fail so a VC has to make sure the projects that do make money make enough of it to cover the losses of the failures they also have to make sure that the parties who back them get a healthy return on their investment even with the risks VC's love Tech startups because of their ability to scale easily as for how much money Jane and Brian would get that depends on where their company is at seed funding is at the earliest stage basically something to get
the party going series A is for when the company has established product and Market it started to make some serious buzz and its customer base is growing fast series B is when the company has started to make some considerable Revenue in select markets and is looking to expand operations series C and onwards is when the company has grown up and is likely operating on a global scale it may be ready for an IPO to be bought out by another company or continue operating as a private firm so let's say Jane and Brian have stayed in
the game gone through series C and are now ready for the next step they decide to IPO making their company public on the stock market that goes well and Marcus sees a nice return on his initial investment so there you have it venture capital is a high-risk High reward game that funds innovative ideas and keeps the tech world going
