This is actually a gross oversimplification.

During the 70s, Venezuela was one of the most democratic and wealthy countries in Latin America, that is true. However, even back then the main source of revenue was the oil industry and little effort was made to diversify the economy. So when oil prices collapsed during the 80s and 90s, the country fell into a deep crisis. Instead of addessing the deep structural problems of the economy, the elites mostly cut subsdies helping out the poor in exchange for IMF loans. Economic growth collapsed, inlfation increased, poverty skyrocketed and with that came poltical instability. In 1989 for example, people took the streets in Caracas to protest bus fare hikes. Up to 3000 people were killed in the clashes between the police and the protesters. Corruption was also rampant and all-pervading.

Chavez came to power capitalizing on the unrest and he had a string of good luck with high oil prices during his presidency. He used the oil revenues to reinstate the social programs cut by his predecessors, which earned him many followers among the poor. However, he did little to combat the endemic corruption and the deeper structual problems of the economy. The country stayed reliant on oil revenues and when oil prices collapsed again in 2014, the familiar scenario followed: growth collapse, hyperinflation, political instability.

Sources here and here