You may be doubly confused. VC here does refer to venture capital firms - sometimes they're no more than a few people running the firm, in which case you could

You may be doubly confused. VC here does refer to venture capital firms - sometimes they're no more than a few people running the firm, in which case you could refer to the individuals as venture capitalists. These firms invest in startups, businesses which create a product. Their job is to "choose winners." But where do the individuals making up a VC firm get that money to invest? It's very rarely their own wealth. Instead, they get it from LPs - endowments, pension funds, big banks, family offices (which manage multi-millionaires' money), all of whom want to get on the Silicon Valley wave. And those LPs certainly expect to get better returns than if they just put it in the bank, or into the stock market. So there are two levels at which a "company" must "raise" money - the startup from the VCs, and the VC from the LPs.