What is smart money?

Smart money is an investing term that’s often used in the venture capital world. Smart money basically means money that is invested by other people in a company, but the people who invest that money also invest their time, advice, and whatever else they can into the company. That is why it’s called “smart” money, because it’s not just money, but also the wisdom of the investors that’s added by the investors.




Smart money versus dumb money

Dumb money, on the other hand, is just money that is invested without the investors putting in any time, advice or anything else. So, all the company is getting is the money and nothing along with it, and that is the difference between smart and dumb money.

Example of “smart money” in a sentence

"The company was only accepting smart money from investors
because it wanted the advice and wisdom that came with 
the money from the outside investors."

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