Venture capital or vulture capital?

I have a stake in a superannuation fund and after reviewing the asset allocation, I see around 6% is allocated to venture capital. I know I am not really a venture capitalist so I need to ask myself, what exactly is venture capitalism?

So venture capital is defined as private equity investing that is a form of financing for emerging and early-stage start-up businesses deemed to have high growth potential. These start-up businesses require capital to grow and tend to burn through capital in their initial stages of development.

Naturally these business ventures tend to be risky investments and more conventional forms of debt financing are not available due to the risk factors that bankers avoid. Notwithstanding, the returns for investors are going to be greater than more traditional forms of finance.

For businesses without access to traditional capital markets, venture capital is an essential form of financing and I love this new wave of entrepreneurial value creation. Ordinary people with great ideas and drive have the ability to succeed in this new wave of business activity that is generating wealth for the owners, investors and providing jobs for the employees of these new businesses.

That being said, apparently the conditions placed on firms in exchange for venture capital are arduous as the risk has increased and more traditional lenders are more concerned with their risk profile that growing small businesses.