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What are the risks of venture capital?

In: Small Business and Entrepreneurship, Startup Finance, Angel and Venture Capital [Edit categories]

Answer:

Answer

The primary risk of venture capital investing is that the companies into which the capital is invested will fail, and the money will be lost.

The risk of investing money as a Limited Partner into a venture capital fund is that the managers of the fund (the General Partners, or 'venture capitalists') will pick more losing companies to invest in than winning companies, and that over time the total return from the fund will be less than might have been received from alternative investments.

First answer by Yorker. Last edit by Yorker. Contributor trust: 37 [recommend contributor ]. Question popularity: 25 [recommend question].

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