Venture Capital : the job where failing is a good thing

Betting on cars (startups) and drivers (founders)

What is Venture Capital (VC)?

So, what exactly is Venture Capital? At first, it sounds like a finance job, but it’s far from your standard desk work. It’s where funds invest in start-ups and pray to make money. Seriously, it’s all about investing in startups, hoping they grow into the next big Apple or Facebook. VC firms analyze thousands, dozens thousands of start-up, meeting with founders, to invest in their ideas, products, and companies to help them grow.

Some VC funds don’t have to chase after deals - they come to them, due to their track record, history, or popularity.

Imagine the startup world as a long race, and the startup is a car. Venture Capitalists are there to fuel the car, helping it go as far as possible. Your job, as the startup founder, is to develop the product, gain customers, and generate revenue to keep the car moving.

VCs aren’t just bystanders-they’re co-pilots. they have the cash to buy fuel for the car (your business). Sometimes, when you’re running low, they might still back you because they believe in your potential, or because you’ve hit specific milestones that prove you can go further. Other times, when the car starts breaking down, they lose faith, get out, and let you run out of fuel.

This is the VC game.

The Different Stages of Venture Capital

There are different “games” or stages in Venture Capital. Some VCs focus on the early stage, jumping into your car when it’s barely out of the garage. They invest in you - the drive - and your ability to execute on an idea. At this stage, it’s less about how far about how far you’ve gone and more about who’s driving.

Then there are late-stage VCs who hop in when your car has already covered some distance. Their goal is to push you further, ideally toward a big exit like an acquisition or IPO. These investors are much more focused on metrics, growth, and the traction you’ve already achieved.

These stages are usually defined by funding rounds - starting from “Pre-seed and going through Series A, B, C, and beyond. The further along you are, the later the funding stage.

Now, let’s talk about how VCs choose which car (startup) to invest in.

The VC Mindset: Failing is Normal

In the VC world, failure is as common as pit stops in race or F1, it’s just part of the journey. Not every car will make it to the finish line, and that’s perfectly okay for investors.

But in Venture Capital, failure is just part of the process. They fail all the time. They take many rides and often end up going home by foot. Their job is to make bets, knowing full well that most of them won’t pay off.

VCs get their money from Limited Partners (LPs) and their strategy is to sign as many cars as possible (not exactly, but you get the idea). They know the road ahead is filled with obstacles - some drivers will argue about the best route, some cars will get lost, and others will break down before reaching the final lap.

But here’s the key: VC doesn’t need every car to finish. They only need one car to speed across the finish line, delivering that coveted 100x return (okay, maybe not always 100x but you get the point). That one success covers the losses of all the failed investments.

It’s a high-stakes, high-reward game - go big or go home. The magic lies in the lack of power: 20% of the effort brings 80% of the results. In Venture Capital terms, just a handful of successful startups generate the majority of the returns.

So, while most races end in failure, all it takes is one victory to make it all worth it. Doesn’t sound so bad after all, right ?