Where Do VCs Get Their Money? Kate McAndrew Explains
On platforms like Shark Tank, most investors put in their own money—they’re called angel investors or wealthy entrepreneurs.
That brings us to a common question from the WebKarobar community:
“Do venture capitalists also invest their own money like in Shark Tank?”
Let’s break it down in simple terms:
Shark Tank investors (the “Sharks”) like Mark Cuban or Lori Greiner usually invest their personal money. That’s what makes them different from traditional VCs. They’re betting their own cash on the startups they believe in.
On the other hand, venture capitalists (VCs)—like Kate McAndrew—typically raise a VC fund made up of other people’s money. These investors are called LPs (Limited Partners) and can include:
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Large single family offices – wealthy individuals or families who’ve built and sold successful companies.
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Corporations – especially those in design and tech, aligned with the fund’s goals.
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Communities of builders – entrepreneurs, designers, and technologists who might invest small to large amounts (even $10K) to support future startups.
Kate McAndrew’s fund, for example, raised $100 million from these LPs. The VC then uses that pooled capital to invest in promising startups.
So, while Sharks use their own money, VCs invest and manage money raised from others. Understanding this helps founders know who they’re pitching to—and how those investors operate.
