Venture capital firms are investment companies that provide funding to startups and small businesses with high growth potential. They typically invest in exchange for equity, meaning they take a share of ownership in the company. This funding helps entrepreneurs develop their ideas, scale their operations, and bring innovative products or services to market. These firms often focus on specific industries, such as technology or healthcare, and look for promising entrepreneurs with strong business plans. By supporting these startups, venture capital firms aim to generate significant returns on their investments, benefiting both the firm and the entrepreneurs they support.