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 Montana (MT), venture capital financing is not governed by specific state statutes that apply exclusively to this form of financing. Instead, venture capital firms and transactions in Montana are subject to general state laws that govern securities, business entities, and contractual agreements, as well as applicable federal securities laws and regulations. These laws include the Montana Securities Act, which regulates the offer and sale of securities within the state, and the federal Securities Act of 1933 and the Securities Exchange Act of 1934, which govern the offer and sale of securities nationally. Venture capital firms must also comply with regulations set forth by the U.S. Securities and Exchange Commission (SEC), including regulations regarding accredited investors and the registration of securities offerings. When venture capital firms invest in startups, they typically do so through equity financing, which may involve the issuance of shares or membership interests in the company. The strength of the management team, the size of the market (TAM), product-market fit, and competitive landscape are key factors that venture capital firms consider when making investment decisions, but these considerations are not regulated by law; rather, they are part of the firms' due diligence and investment strategy.