Venture Capital Explained

A MANimate Production

[classofhomeworkhelp]

That was a wonderful explanation on how venture capital works.
However a small additional detail that you missed, Gene's money is actually not her own, she manages the funds of many people who have invested their money.
If gene actually invests her own money, she would become an angel investor!

[vishalIP]

Forget Genie and Jack! I am writing this comment to give a standing ovation to the person drawing the illustrations on a whiteboard!! drawing those "chips" all over the board needs a lot of patience! great job!

[JohnSmith-ywnk]

Venture capital firms are companies that raise money from rich people, rich families, corporations, and retirement funds. They then take that money and invest it in high-risk but potentially high-returning fast growing small private companies.

As such, venture capital funds tend to think a lot about risk and reward in their investment decisions. On one hand, they often won’t be the first check into a company, because they are risking their investors’ money. On the other hand, they want to partake in opportunities that could potentially be very high reward — perhaps even returning $10k to the $1 in very great outcomes. This tends to favor scalable technology product companies (software, biotech / pharma, etc) over services companies like consulting businesses or retail / brick and mortar, which scale much more slowly (or not at all).

[SportsIncorporated]

It's now 2019 and Jack can consider crowdfunding.

[davidotienookello]

This is really easy to understand, thanks. Its so far the best explanation i have gotten online.

[AlexVoxel]

Jack is risking little to nothing, doesn't seem like a bad deal...

[banzuki]

Thank you. Quick, precise and very engaging explanation.

[danielmumby]

But in reality, no VC would want 60% of a venture on such terms. Firstly, they would likely be in breach of governing rules around % of ownership. And secondly, should the business require additional capital at some point, no other VC would touch them on the basis that Jeanny gave (and Jack accepted) such bad terms.
VC's dont want a controlling interest - rarely do they want to run a company; that is against their charter with their own investors (known as LP's).
As entrepreneurs, you should make sure you do your own homework and never accept such simplistic stories as reality.

[huntrrams]

I have been watching the early seasons of Silicon Valley without knowing about what a VC was. Thank you for explaining!

[emreer]

Thanks a lot.This helped me so much before my economics final.

[HashiramaUchiha-qz]

One of the best explanation ever i heard

[franckxqflan]

Thank you so much it was simple, precise and extremely useful

[venugopal-gfnk]

simple and speed explanation of concept

[gaurav]

Jack And Gene.. :) 2 minutes of Brilliance :)
Thanks for helping.
Gr8 Work.

[bmuceip]

When I see such video I understand that it will be short and useful.

[cryptoomah]

Thanks for this video... it was well explained and simplified

[gilgalumia]

Thanks for this beautiful explanation

Well understood

[TheKrypticSpeed]

So basically if you want to decide whether you should go further or not with the company you should always hold the majority share.

[JATTBOYZ]

Very well presented. Thanks for sharing.

[Larry]

This is an absolute delight. I had the pleasure of reading something similar, and it was an absolute delight. "The Hidden Empire: Inside the Private Worlds of Elite CEOs" by Adam Skylight