Business financing for startups and high-growth businesses that have long-term growth potential. The risk is typically high for investors, but the upside offers significant opportunity. Start-ups are usually based on an innovative technology or business model and they are usually from the high technology industries, such as information technology, social media or biotechnology. Firms or funds invest in these early-stage companies in exchange for an ownership stake. Typically venture capital investment occurs after an initial seed funding round. The first round of institutional venture capital is called the Series A round. Venture capitalists provide this financing in the interest of generating a return through an eventual “exit” event, such as the company selling shares to the public in an IPO or doing a merger and acquisition.