The paper analyzes the development of the venture capital market and financing methods for startup companies in Croatia and Central and Eastern Europe, focusing on their impact on innovation and economic growth. Investing in startups through venture capital offers significant potential for growth and innovation, while also contributing to strengthening exports and the competitiveness of the economy. Considering the rapid growth of the venture capital industry, the paper provides a detailed analysis of the latest statistical data and reports to present the current state and development trends of the venture capital market. The paper thoroughly explains all relevant elements, from the inception of startups and their life cycle to the development of the financial infrastructure necessary to support them. The business model of venture capital funds is also examined to provide a clear picture of their functioning and risk-taking models. The Croatian and regional venture capital markets are analyzed alongside the development of the startup ecosystem, with a focus on economic indicators of raised capital and its impact. The paper compares the development of domestic and regional markets with other global markets, highlighting similarities and differences between them. The role of the European Union and the Republic of Croatia in the development of the ecosystem, legislation, and financing of venture capital funds is also identified. The aim of the paper is to provide a detailed overview of the entire Croatian startup ecosystem, highlighting its strengths and weaknesses compared to other countries in the region and the world, and demonstrating its level of development and uniqueness.