In a narrow sense, venture capital is the equity capital invested by professional financiers in emerging, rapidly developing and fiercely competitive enterprises.

Broadly speaking, any investment in the production and operation of technology-intensive innovative products or services based on high technology and knowledge is venture capital. This definition is much broader, but it emphasizes the innovation of enterprises.

From the actual operation of venture capital, the high risk and high return of high-tech enterprises are mainly reflected in the high-speed development stage of enterprises, and the return rate gradually declines after enterprises enter maturity. Therefore, venture capitalists generally withdraw their funds when the enterprise is about to enter maturity, in order to obtain high investment returns, and then choose projects to invest.

It is not difficult to find that the proportion of venture capital in the whole venture capital is not very large, and venture capital should be a part of venture capital.

Venture capital enterprises must engage in venture capital that the state needs to support and encourage in order to enjoy preferential investment credit. Two years after the invested enterprise won the title of "High-tech Enterprise", 70% of the investment of venture capital enterprises can be deducted from the taxable income of that year. If the taxable income of venture capital enterprises in this year meets the deduction conditions and is insufficient in that year, it can be deducted in future tax years.