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 Indiana, venture capital financing is governed by a combination of state statutes and federal securities laws. State statutes may include regulations on securities and investments, business entity formation, and general contract law, which are relevant when structuring venture capital deals. Federally, the Securities and Exchange Commission (SEC) oversees and enforces securities laws that apply to venture capital transactions, such as the Securities Act of 1933 and the Securities Exchange Act of 1934, which require certain disclosures and compliance measures for companies seeking investment. Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Jumpstart Our Business Startups (JOBS) Act have provisions affecting venture capital firms and startups. Venture capital firms in Indiana must also consider the Indiana Securities Division's regulations, which enforce compliance with state-level securities laws. When venture capital firms evaluate potential investments in Indiana, they must do so within this legal framework, ensuring that all due diligence, investment, and reporting practices comply with both state and federal law.