Venture capital is a form of investment that firms use to invest in startups and other emerging organizations with high growth potential. In other words, VC firms bet on companies with hopes that they’ll grow into larger corporate powerhouses.
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That's a significant drop from 2022’s $242B, reflecting market uncertainty but continuing VC’s role in scaling transformative ideas. Rooted in early risk-sharing models, venture capital took off with firms like ARDC in 1946, later evolving into today’s influential players like Sequoia Capital and Andreessen Horowitz.
Household name companies such as Airbnb and Uber might not exist without venture capital, which is commonly referred to as "VC" for short.
This Lego video provides a simple yet broad explanation of the venture capital industry while going easy on the finance jargon.
While the aforementioned whaling industry has a lot of similarities to today’s venture fund models, the first modern venture capital firm wasn’t founded until 1946.
Early-stage startups are highly risky investments. Many companies in a VC portfolio will not provide any significant return.
Venture capital firms get the money they use to invest in companies from limited partners, also called LPs. It’s the general partner’s job to manage that money and invest it in the right startups.
From Pinterest to Yelp, Bessemer Venture Partners—one of the most well-known VC firms—has invested in many successful companies over the years. But the firm has also kicked itself for passing on a few great opportunities, like Apple and Google. Check out the other companies in Bessemer's "anti-portfolio" here.
Best known for investing in companies that wanted to utilize some of the technology developed during World War II, the ARDC’s cofounders all held prestigious positions at places like MIT and the Federal Reserve Bank of Boston.
To qualify, investors are ranked by portfolio companies that have gone public or been acquired for at least $200M in the past five years, or that have at least doubled their private valuation to $400M or more over the same period.
In 2023, Singapore had the highest venture capital funding per capita in the world. But that doesn’t necessarily mean it’s the best place to have a startup. In 2023, Pitchbook analyzed data to determine the world’s best startup city, including fundraising activity, venture capital deals, and exit value. San Francisco ranked as No. 1. See which other locales landed in the top 20 with this graphic.
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