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 Delaware, venture capital financing is a significant aspect of the state's business ecosystem, particularly because Delaware is a preferred jurisdiction for incorporating businesses, including startups seeking VC funding. The state's corporate law framework, primarily the Delaware General Corporation Law (DGCL), provides a flexible and business-friendly environment that is attractive to both startups and venture capital firms. While there are no specific Delaware state statutes that regulate the venture capital financing process itself, the relationships and agreements between investors and companies are governed by contract law, securities law, and the fiduciary duties of corporate directors and officers. Federal securities laws, such as the Securities Act of 1933 and the Securities Exchange Act of 1934, also apply to venture capital transactions, especially regarding the offering and sale of securities, disclosure obligations, and anti-fraud provisions. Startups in Delaware seeking venture capital must comply with these laws, and venture capital firms will conduct due diligence to ensure that the companies they invest in meet legal and regulatory standards.