1. Venture Capital and Startups

Venture capital is a type of financing where investors provide money to startups and small businesses with high growth potential in exchange for equity, or ownership stakes. This funding helps companies develop their products, expand, and bring innovations to market. Startups often seek venture capital when traditional bank loans are not feasible due to their lack of track record. In return, investors aim for significant returns on their investment if the startup succeeds, though there is a high risk of failure involved, as many startups do not make it past their initial stages.