Money that is given to entrepreneurs to invest in a start-up business or to develop a product. Venture capital is a very risky investment and those investing money may lose their entire investment. However, if a product or business becomes successful, the return can be huge. Venture capital is raised by venture capital firms who solicit investments from institutional investors, such as banksÂ’ private equity units, pension funds, or other investment management firms, as well as from wealthy individuals. Venture capital investments are made at different stages, with some venture capitalists focusing only on seed, or initial, investments, others on middle stage firms and others on later stage companies that have a viable product that is producing revenues.