Definition and Purpose: Venture capital provides capital to early-stage, high-potential companies in exchange for equity, essential for companies unable to secure conventional loans. Funding Stages: VC investment spans from seed funding to later stages, aiding in product development, market presence, scaling, and expansion. Role of Venture Capitalists : Beyond financial support, venture capitalists offer mentorship, industry expertise, and networks, enhancing a startup's operational and strategic capabilities. High Risk, High Reward: Venture capital is risky, but successful investments can yield substantial profits, offsetting losses. Exit Strategies : Common exits include IPOs and M&A , allowing investors to realize returns. Impact on Innovation and Economy : VC fosters innovation and economic growth by enabling disruptive technologies and business models to flourish.

It fills a critical gap in funding for new and innovative businesses. Startups often face challenges in accessing traditional bank loans or public markets due to their high-risk nature and lack of established revenue.