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 Georgia, venture capital financing is governed by a combination of state statutes and federal securities laws. State regulations, under the Georgia Securities Act of 1973, require that any offer or sale of securities, which includes venture capital investments, must either be registered or exempt from registration. Additionally, venture capital firms and their managers must comply with the Georgia Uniform Securities Act, which includes provisions for the registration of securities professionals and enforcement of anti-fraud measures. At the federal level, the U.S. Securities and Exchange Commission (SEC) regulates venture capital firms under the Investment Advisers Act of 1940 and the Securities Act of 1933. These laws mandate registration, disclosure, and compliance requirements for venture capital firms. They also set the standards for what constitutes an accredited investor, who can legally invest in high-risk ventures such as startups. When venture capital firms evaluate potential investments in Georgia, they must adhere to these regulations while considering the strength of the management team, the size of the market, product-market fit, and the competitive landscape as part of their due diligence process.