Venture capital is a type of funding. Private firms offer it to a startup company that has demonstrated its potential to succeed over the long term. In exchange for providing capital, the venture capitalist receives an equity stake in the company. They hope to realize an attractive return on their investment when the company succeeds.

Providing venture capital is like giving water and fertilizer to a farmer who just planted some seeds. The farmer promises you that when harvest time comes, you will get a part of the yield.

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