Venture capital has become an essential part of how innovative companies are built and scaled — but how the funds behind these investments actually work is often less understood. In this lesson, we introduce the structure and mechanics of venture capital funds to help you better understand how the asset class operates.

Many investors hear “venture capital” and “private equity” used interchangeably — but the reality is they’re very different. This lesson breaks down how each asset class works, what kinds of companies they invest in, and how they aim to generate returns — giving you the context you need to understand venture capital and evaluate its role in your portfolio

Venture capital has evolved from a niche asset class into an essential part of sophisticated portfolios. This lesson provides an overview of venture capital — how it works, key pros, cons, and considerations, and why it might belong in an investor’s portfolio.