Venture capital firms provide funding, financial assistance and even specific guidance to startup technology firms, usually in exchange for an equity share in those companies.
Startups seek out venture capital funding because their status as startups and lack of performance history makes them risky propositions for bank loans. Typically, the only “security” startup firms could provide a lending institution is equity in an entirely unproven company in a volatile tech industry.
This elevated risk level is why banks tend to avoid venture capital. However, venture capitalists see this risk as a prime opportunity to get in early on a company with great potential upside. It is however, a high-risk field, which is why venture capital is usually provided by private investors or firms with some experience in the specific field the startup is entering.