DEFINITION of Adventure Capitalist

An adventure capitalist is another word for "venture capitalist," or someone who invests in start-up companies. The term is also a specific type of a venture capitalist who is more accessible, but who may be harder to find and whose pockets are not as deep as a traditional venture capitalist. This can also refer to a specific type of venture capitalist who is willing to invest in endeavors that would be considered too risky for traditional venture capitalists.

An adventure capitalist may refer to a wealthy individual who seeks out exciting experiences.

Adventure Capitalist (2004) is also the title of a book in which author and former Wall Street financier Jim Rogers describes his three-year, 116-country road trip. Rogers retired at age 37 and has also toured the world by motorcycle, setting Guinness Book records for both trips.

BREAKING DOWN Adventure Capitalist

Adventure capitalists invest in smaller upstarts when they are young and in need of funding to expand their operations. They may specialize in investing in particular industries in which they have specialized knowledge. Adventure capitalists also take on a great deal of risk, but often have a say in company decision making and can earn large returns on their investments if the company succeeds.

How Adventure Capitalists Operate

Like venture capitalists, adventure capitalists make investments understanding the high propensity among startups to fail. Adventure capitalists may be more readily interested in backing startups that have a challenging path ahead. The expectation may be that these startups could potentially offer a great return on investment if they succeed, an outcome that may make the heightened risk worthwhile. Seeing positive returns from such gambles may happen less often than with traditional deal strategies. 

An adventure capitalist might adopt a more energetic approach, seeking out potential deals at a faster pace in order to take advantage of opportunities as they present themselves. The approach adventure capitalists pursue may be based on the idea that startups who are breaking ground on new industries or other untested markets have the chance to scale up more rapidly than other companies.

For instance, an adventure capitalist might have backed startups that were creating the first platforms for social media, knowing the concept largely did not exist until such companies became established. The risk of failure remained high as social media required the public to weigh in and participate with the media. If the public did not take interest in social media, regardless of type, the investment in such companies would have proved fruitless.