Risk capital has been gaining increased interest from both investors' and financing seekers' sides in recent years. This was largely due to the global economic downturn that made most of the investment assets unattractive and financing sources unavailable. Latvia hasn't been an exception in this respect and in this thesis risk capital, policies and schemes designed to facilitate its development in the country are thoroughly analysed. More importantly it states what policy distribution channels Latvian government is using, what problems its facing and how it deals with them.