Venture capital is a type of financing that firms and funds use to invest in startups they believe have the potential for long-term growth

In 2023, venture capital firms invested $170B in over 15,000 US companies

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.

How venture capital firms came to be

The venture capital firm that kickstarted an industry.

See the anatomy of a venture capital firm

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.

Angel investors typically fund a startup at an earlier stage than venture capitalists

Angel investors and venture capitalists both invest in startups, but they differ in a few key ways. Angel investors typically invest earlier and in a smaller amount.

From 19th-century whalers to startup accelerators, venture capital has a pretty exciting history

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.

Explore the differences between private equity, venture capital, and hedge funds

Private equity firms focus on buying and improving private companies with the intent to sell them for profit or take them public. Venture capital is technically a form of private equity in which investors focus on startups and generally don't seek majority control of the company. Hedge funds are pooled investments for sophisticated investors that pursue a wide range of often complex strategies.

Startups fundraise in 'rounds' as they prove out their business and scale

When startups take on outside funding, those investments are divided into different "rounds." These rounds are catered to different stages in a startup's life cycle—a startup often needs different types of investors and amounts of funding at different stages of the business. For instance, a pre-seed investment round can include investments ranging from about $25K to $500K, whereas a Series D investment can be hundreds of millions of dollars.

80% of a VC firm's returns come from 20% of the deals, per VC's 'power law'

Early-stage startups are highly risky investments. Many companies in a VC portfolio will not provide any significant return.

According to some estimates, roughly 75% of venture-backed startups fail, making startups inherently risky ventures.

2025 venture capital funding by destination, visualized

This chart's source, Dealroom, uses "breakout capital" to refer to funding rounds or companies in the $15M to $100M total funding range. It labels the startup stage as under $15M, and the scaleup stage as $100M+.

Venture capital explained through Lego bricks

Startup accelerators offer mentorship and seed funding in exchange for equity

Those programs, such as Y Combinator and Techstars, not only offer expert advice to founders, but also seed funding in exchange for equity. The goal is to help young startups learn from successful companies, making it more likely they attract venture capital.

Find out how venture capitalists make decisions

More than 30% of venture capital deals come from leads courtesy of a VC’s former colleagues or professional network. You can learn more about how venture capitalists decide which companies to invest in by reading this article.

Angel investors often come together as a syndicate

Startups raise money in different rounds from investors that include their friends and family, angels, and venture capital funds. These types of investors serve different purposes.

Nonprofit VC funds invest in startups, but have donors instead of LPs

Examples include Andreessen Horowitz’s TxO (Talent x Opportunity) Initiative and Fifth Star Funds, which allows donors to write “Friends & Family” checks for Black tech founders.

Seed funding is often the first round of capital that a startup raises

Early-stage startups often try to secure seed funding from investors in order to take their idea from concept to reality.

Why women are underrepresented in VC

Only about 11% of investing partners at venture capital firms are women, according to Harvard Kennedy School research. What’s more, only about 13% of VC dollars go to startups with a woman on the founding team. To learn more about why women are so often sidelined on both sides of the venture capital equation, click here.

'Startups' can be defined as small, early-stage companies that are designed to grow fast.

The American Research and Development Corporation is considered the first modern VC firm

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.

Andreessen Horowitz is among the most well-known venture capital firms

Also known as a16z, the firm has invested in companies such as Airbnb, Facebook, and Lyft since its founding in 2009. A podcast episode offers a deep dive into how the firm got started and became the industry disruptor it is today.

Platforms like AngelList help angel investors find startups to fund

Angel investors leverage their high net worths to fund seed-stage startups. While they could see high returns, investing in such an early company is a risk.

The venture capital mindset is shaping the US into a 'portfolio state'

For decades, the US has operated as a low-regulation, private-sector-driven, globalized economy (also known as neoliberalism). In recent years, the Trump administration has taken direct stakes (rather than providing subsidies) in private companies with strategic products like semiconductors and rare earths. This paper argues the approach allows the US to capture the upside of growth.

See a list of 2024’s top 10 VC firms

A list of the top 10 VC firms, like Sequoia Capital and Andreessen Horowitz, ranked by assets under management shows how those two firms stack up against their competitors—and what kinds of companies those competitors invest in.

Angel investors often receive significant equity because of the risk they take

Angel investors fund startups at an early stage, at which time a company’s success is less assured. In exchange, they often ask for a significant equity stake.

A successful angel investor can multiply their investment by 3 to 10 times.

Global investing in startups hit a record $297B in Q1 2026

The level of startup funding around the world broke all previous records in Q1 2026 by a significant margin: Only $118B was raised in the previous quarter, and Q1's haul outpaced every full year of global VC activity before 2019. The increase was partly due to the enormous funding rounds from AI companies such as OpenAI and Anthropic.

Some venture capitalists believe cryptocurrency will revolutionize global finance

Some of the brightest minds at Andreesen-Horowitz, one of the country’s leading venture capital firms, believe the cryptocurrency ecosystem will revolutionize global finance in the coming decades. This podcast recounts, through their view, the history of crypto, how it works, and trends they see emerging in the future.

SPACs, explained

Special purpose acquisition companies make it easy for mature unicorns (companies valued at over $1B) to receive growth capital by going public. This process effectively skips the work of a traditional initial public offering, and its time-intensive investor negotiations. Typically, a well-known investor with expertise in a certain industry sponsors a SPAC with the intent to acquire a startup. Learn how it works and the risks involved here.

Stanford and Harvard are among the universities producing the most startup founders

Not all startup founders are created equal. This data visualization of the universities that produce the most startup founders is based on the number of alumni who have raised venture capital funding for their companies. That means these alums had to do much more than put "entrepreneur" in their LinkedIn bio to be considered startup founders.

Venture capitalists were once bullish on DTC brands

While a physical store can only hold so many objects, online retailers without the limits of four walls that could sell their products direct-to-consumer could theoretically be great investments. But they didn’t always provide investors with expected returns.

Private equity is viewed as an alternative investment

These different types of private equity include venture capital, growth equity, and buyouts.

The term 'startup'—which is typically used to describe private companies in their early stages of operation that focus on innovating new products or services to meet a market gap—can be traced back to a 1976 Forbes article.

Unlike small businesses, startups aim to disrupt entire industries

They also differ from small businesses in that startups have a higher level of risk, may take on outside funding from venture capital firms to boost growth, and more.

Startup accelerators that include more training activities, such as pitch competitions, tend to have better long-term success rates

That's according to a new study from Wharton. Y-Combinator, perhaps the most famous startup accelerator, currently has 16 alumni companies trading on the public market. But not every entrepreneur who joins a startup accelerator makes it big.

Angel investors funded startups with nearly $28B in 2024

Statistics about the angel investing market show that billions are spent funding early-stage startups each year. Companies with more angel interest had higher success rates.

Cyan Banister, once homeless, was an angel investor in Uber, SpaceX, and DeepMind.

Asia-Pacific's share of global venture capital investment has jumped from 3% to 28% in 20 years

China has driven much of that growth due to its manufacturing power and tech sector. This graphic shows how the share of total venture capital deal value changed around the world between 1997 and 2023.

Carried interest is a share of the profits that a venture capital firm’s general partners earn

Also known as "carry" for short, carried interest is roughly 20% of a fund’s returns, but the exact percentage varies between firms.

Dive deep into the numbers that shape each YC deal

Y Combinator invests $500K into each company in any given batch. $125K of that investment converts into a fixed 7% in ownership of the startup, and the other $375K is invested on something called an uncapped MFN safe. YC explains what that means and more terms of the deal in a detailed article on their website

The first private equity fund was launched in 1960

At the time, the industry—and the public's understanding of it—was rather limited, and few private equity firms existed until the 1980s. The first leveraged buyout is thought to have taken place in 1955.

Uber's first investors included StumbleUpon founder Garrett Camp

In 2010 when Uber went out to raise money, prominent investors including Mark Cuban and Gary Vaynerchuk passed. Vaynerchuk actually said no twice.

The majority of capital in private equity funds is provided by institutional investors

The individuals who invest this initial capital are called the firm's limited partners. Private equity firm LPs include sovereign wealth funds, university endowments, high-net-worth individuals, and more.

Venture firm a16z's crypto canon

Andreessen Horowitz (a16z) is a leading venture capital firm with deep expertise in cryptocurrency and blockchain technology. For 10 years, the firm has built its internal knowledge in the area, and archived a wide range of explainers exploring everything from fundamentals to emerging crypto trends, and much more.

Legendary venture capitalist Peter Thiel once wrote that 'competition is for losers'

With Peter Thiel's "Monopoly Theory," the Founders Fund partner argued that investing in companies that create new categories, rather than those that compete with other businesses in existing ones, is a best practice in venture capital.

The fintech industry was worth roughly $340B as of 2025

Venture capitalists have been bullish on the industry’s future in recent years, too. Some estimate that global investment in fintech increased by 12,000% between 2008 and 2020.

The 19th-century whaling industry is similar to the modern venture capital system

Whaling was like VC in that it was highly lucrative but characterized by low-probability payoffs. Both industries rely on extreme returns from a very small subset of investments.

Many startup founders pull out-of-the-box stunts to get their businesses off the ground.

Vanguard Group founder Jack Bogle created the first index fund, the Vanguard 500, in 1976—but the fund didn't take off until the 1990s.

The Y Combinator startup directory includes every company YC has funded

The startup accelerator has funded more than 5,000 companies over the years. This YC-specific search engine lets you look up any company to find out if it's a YC alum.

How ‘vulture’ hedge funds make money

Some hedge funds specialize in snapping up distressed assets, like failing newspaper chains, and further stripping down their operational expenses in a bid to make a profit from the initial capital outlay. Delve into how one secretive firm known for the practice operates—and what’s at stake for the broader economy.