Venture capital refers to equity investments made for the launch, early development, or expansion of businesses. Venture capital comes from institutional investors like pension funds and is organized through limited partnerships with venture capital firms. Venture capitalists source potential deals, conduct due diligence, manage investments through board seats, and aim to harvest investments through exits like mergers and acquisitions or IPOs within 3-5 years. Their goal is to maximize returns for investors, though most portfolio companies do not become successful exits.