<![CDATA[Venture capital is a risk-based financing scheme combining equity participation with proportional risk and profit sharing between venture capital companies (PMVs) and partner companies (PPUs). Literature and practice, however, show a shift in venture capital's character toward instruments resembling debt-based financing, emphasising material collateral and fixed repayment terms. This article analyses the implementation of the profit-sharing principle in PMV–PPU financing agreements from the perspectives of contract law, Financial Services Authority regulations, the doctrine of freedom of contract, and MSME protection. The research uses a normative juridical method, examining the Civil Code, financing-institution and venture-capital regulations, and relevant decisions and doctrines, supplemented by Islamic economic literature on profit-and-loss sharing. Analysis shows that the profit-sharing principle conceptually requires sharing risks and profits consistent with equity participation. However, material collateral and fixed instalment obligations in some contract designs alter the creditor-debtor relationship and obscure the nature of risk. This article recommends reconstructing contract design and affirming limits on collateral use in venture capital financing to harmonise freedom of contract, venture capital's character, and PPU protection as an MSME actor.]]>
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