Venture capital, a form of private equity financing, involves investors providing funds to startup companies and small businesses with long-term growth potential. In exchange for the investment, venture capitalists typically receive equity stakes in the companies they support. This capital injection enables startups to expand, develop innovative products or services, and scale their operations. Venture capital firms play a crucial role in fostering entrepreneurship and innovation by providing financial resources, mentorship, and strategic guidance to promising startups, thereby driving economic growth and job creation.