InsiderFlow › Glossary › What is venture capital?

What is venture capital?

Venture capital funds high-potential startups in exchange for equity: a few huge wins pay for many failures.

VC funds invest in young, risky companies, from seed stage through growth rounds (Series A, B, C...). The model follows a power law: out of ten investments, most fail, some return the capital, and one — if things go well — returns 50 or 100x, repaying the whole fund.

Silicon Valley was built this way: Apple, Google, Amazon, Meta and nearly every tech giant had venture capitalists like Sequoia, Kleiner Perkins or Andreessen Horowitz behind them.

Concrete example

The $60 million Accel invested in Facebook in 2005 was worth over $9 billion at the 2012 IPO: a 150x return that alone justified a decade of funds.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

Are VC and private equity the same?

No: VC buys minority stakes in loss-making startups betting on growth; PE buys control of mature, profitable companies.

How can retail investors access VC?

Almost never directly; equity crowdfunding platforms exist, but total loss is the norm, not the exception.