eli5: What’s a venture capitalist?
In: 4
Basically people or groups with lots of free money who are hoping to be part of the next big thing. Assume that you are the founder of a new company that creates a new and unique type of widget. You need money to get the company going so the VC people buy stock a (ie. They give you a lot of money for a partial stake) in the company. When the company does well, they make money in the way of stock value. If the company doesn’t do well, then they lose their money.
TLDR; it’s all an educated gamble.
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