Institutional funding for high-growth startups
Venture Capital (VC) is a form of private equity where institutional funds invest in high-growth startups in exchange for equity. VCs raise money from LPs (pension funds, endowments, family offices) and deploy it into a portfolio, expecting a few big exits to drive fund returns.
Sequoia invested $60M in WhatsApp. When Facebook acquired it for $19B, Sequoia made ~$3B — roughly 50x. One exit like this defines a fund.