Although venture capital is a well-established source of funds for early stage
companies in overseas jurisdictions and the process of venture capital investment is well understood, the availability of venture capital has been limited in New Zealand until recently and the process is not so well understood here. However, recent fund raising activity (spurred by initiatives like the government funded New Zealand Venture Investment Fund) has raised awareness and availability of this form of funding in New Zealand.

Venture capital is typically the most active form of investment. This fact and the high risk nature of venture capital distinguish it from other types of finance and investment and largely explain why typical venture capital terms are quite different in many respects to terms which typically apply to other types of investment. The most striking difference is the preferential rights usually required by a venture capital investor. Accordingly, it is important for a company seeking venture capital to try and match the venture capitalist's skills with the requirements of its business to ensure it gets value for the preferential equity terms.

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