How a VC fund works
4 cards · about a minute · 22 October 2026
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A VC fund pools money from many investors.
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It invests in young companies for a share of them.
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1 in 10
Example: winners that pay for the rest
Most bets fail, so VCs look for ones that could grow huge.
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~10 years
Typical life of a fund
That's why VCs ask how they'll get their money back.
Test yourself
Why do VCs look for startups that could grow huge?
- Most bets fail, so a few big wins pay for the rest
- They must back every startup they meet
- Big startups are cheaper to buy
Show the answer
Most bets fail, so a few big wins pay for the rest. A fund often needs one or two huge winners to cover its losses.
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