What is venture capital (VC)?
Venture capital (VC) is money from investment firms that fund young, high-growth companies in exchange for equity, expecting a few large wins to pay for many losses. A VC fund is usually a partnership: the firm's general partners invest money raised from limited partners such as pension funds, endowments and wealthy individuals. Many investments lose money, and a small share of deals produce most of the returns.
Why it matters to a revenue leader
Venture money comes with a growth expectation, and that expectation becomes the revenue plan. Because a fund needs a few outsized outcomes, investors push each company to grow fast enough to be one of them. A revenue leader at a venture-backed company should know how much was raised, at what valuation, and what growth the board believes that capital buys.
Example
Fictitious numbersA software company with $5 million in ARR raises $15 million from a VC fund. To matter to that fund, the company needs a credible path to a large exit, so the board approves a plan to reach $12 million in ARR within a year. The new CRO inherits a plan to hire 10 sellers built on that target.
"What growth rate did our investors underwrite when they invested, and does our sales plan match it?"
Sources
- Venture Capital checked 9 Oct 2026
- Performance Data and the 'Babe Ruth' Effect in Venture Capital checked 9 Oct 2026