capital
KAP-ih-tul
/ˈæpɪtəl/
Wealth in the form of money or other assets owned by a person or organization or contributed for a particular purpose such as starting a company.
Capital isn't just cash in a wallet; it's wealth that is used specifically to create more wealth (like machinery, buildings, or investment funds).
The story behind the word. From the Latin 'caput,' meaning 'head.' In ancient times, wealth was often measured by the number of 'heads' of cattle a person owned. Eventually, it came to mean the 'head' or principal sum of a loan, distinct from the interest.
Word relationships
- assets: Assets are everything a company owns; capital is the specific wealth used to generate income.
- funds: Funds usually refers specifically to money; capital can include equipment and property.
Commonly confused with
- capitol: Capital is money/assets; Capitol is a building.
Word family
- capitalize (verb): To take advantage of; to provide with capital.
- capitalism (noun): An economic system based on private ownership of capital.
Collocations
- venture capital
- working capital
- human capital
- capital gains
Example sentences
- "Capital is that part of wealth which is devoted to obtaining further wealth." A classic economic definition.
- "The founders are looking for venture capital to help them scale their production." Discussing startup funding.
Memory hook
Capital is the 'head' (main) amount of money you need to start a business. Capital = Head of the business wealth.
When not to use
Don't confuse with 'capitol,' which is a building where a legislature meets.
Fun facts
- The term 'human capital' refers to the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value to an organization.
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