A type of factoring (asset-backed lending) that provides financing to start-up firms (ventures) by purchasing their accounts receivable. This is done by discounting the nominal value of a start-up’s receivables and paying the net amount to the start-up before maturity date (of these receivables).

Similar to factoring in its general form, venture factoring may come in many guises including recourse factoring, non-recourse factoring, notification factoring, non-notification factoring, etc.