Venture capital refers to the type of investments of financial investors in the share capital of unlisted companies, which can potentially achieve high growth rates in a period of 3 to 7 years.Generally speaking, venturecapital investment has proven to be crucial for financial market that supports the development of that part of the economy which is largely unavailable for financing by financing through debt or issuing shares. This most often applies to new companies, innovative fast-growing companies, companies undergoing restructuring, etc. The problem of the research is the status of venture capital in the Republic of Croatia and the conditions that entrepreneurs must meet in order to receive these funds. The aim of this paper was to analyze and compare the advantages and disadvantages of venture capital and traditional methods of financing in Croatia. The analysis showed that the venture capital market in Croatia is still underdeveloped and that traditional sources of financing are more represented. However, some progress is being made in cooperation with the EIF, and the overall vision of support for venture capital for SMEs should have a significant impact on the development of the venture capital market.