Venture capital is a type of financing that investors offer to startups and small businesses with great potential. This type of financing can come at any stage of the business but it is most commonly provided during the earlier stages. In a venture capital deal, a few investors are given the opportunity to invest in the business in return for an ownership percentage.
The main difference between venture capital and private equity is that venture capital deals tend to take place in the early stages of the company. Private equity tends to look more at established companies with a solid presence in the market.