Venture capital is money invested in early-stage, high-potential startups in exchange for equity ownership.
For example, a Canadian AI startup raises $3 million in venture capital from a tech-focused VC firm in exchange for a 20% equity stake. The VC firm's partner joins the board, providing strategic guidance and investor network introductions in addition to the capital.
Why it matters: They provide the rocket fuel for hyper-growth tech companies, accepting a high failure rate in exchange for unicorn returns.
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