Venture capital refers to a type of financing provided to startup companies and small businesses that have high growth potential but may be too risky for traditional forms of financing such as bank loans. The capital is typically provided by investors or venture capital firms in exchange for an equity stake in the company. Venture capital is considered a long-term investment as it may take several years for the startup to become profitable and provide returns to the investor. Venture capital is often associated with high-tech industries and innovative ideas that have the potential to disrupt traditional markets.