Venture capital financing (also known as venture capital funding or VC funding) is a form of financing for new or early-stage companies with high growth potential. Venture capital financing is offered by venture capital firms, which are professional investment firms that receive investment money from state pension funds, university endowment funds, and wealthy individuals. Venture capital firms seek multiple returns on their initial investment in a startup company. When evaluating companies to invest in, venture capital firms consider many factors, including (1) the strength of the management team; (2) the size of the market the company is in (total addressable market or TAM); (3) whether the company has proven there is demand in the market for its product or service (product-market fit); and (4) how easy or difficult it will be for other companies to compete with the company seeking venture capital financing.

In Pennsylvania, venture capital financing is a key avenue for early-stage companies with significant growth potential to secure funding. Venture capital firms in PA, as elsewhere, are investment entities that pool money from various sources, such as state pension funds, university endowments, and affluent individuals, to invest in promising startups in exchange for equity. These firms aim to achieve substantial returns on their investments. When assessing potential investment opportunities, venture capital firms in Pennsylvania consider several critical factors. These include the robustness of the startup's management team, the size of the market (total addressable market or TAM) the company is targeting, evidence of product-market fit indicating demand for the company's product or service, and the competitive landscape that could affect the company's success. While there is no specific state statute in Pennsylvania that governs venture capital financing, such transactions are subject to general state corporate laws and federal regulations, including securities laws that govern the offer and sale of company equity.