1. 25 Investments: Introduction
  2. 25 Investments: American Depository Receipt (ADR)
  3. 25 Investments: Annuity
  4. 25 Investments: Art and Collectibles
  5. 25 Investments: Bonds
  6. 25 Investments: Cash
  7. 25 Investments: Closed-End Investment Fund
  8. 25 Investments: Common Stock
  9. 25 Investments: Convertible Bonds
  10. 25 Investments: Corporate Bond
  11. 25 Investments: Futures Contract
  12. 25 Investments: Life Insurance
  13. 25 Investments: The Money Market
  14. 25 Investments: Mortgage-Backed Securities
  15. 25 Investments: Municipal Bonds
  16. 25 Investments: Mutual Funds
  17. 25 Investments: Options (Stocks)
  18. 25 Investments: Exchange-Traded Funds
  19. 25 Investments: Preferred Stock
  20. 25 Investments: Private Equity
  21. 25 Investments: Real Estate & Property
  22. 25 Investments: Real Estate Investment Trusts (REITs)
  23. 25 Investments: U.S. Treasury Securities
  24. 25 Investments: Unit Investment Trusts (UITs)
  25. 25 Investments: Venture Capital
  26. 25 Investments: Zero-Coupon Securities
  27. 25 Investments: Conclusion

Venture Capital, or VC investing, is essentially the same as private equity investing in private companies, save for the fact these are very young, or new companies.  In some cases, operations may have not yet even formally begun yet.  For the same reasons as P.E. investing and combined with the fact these are young and risky companies, this is a risky investment endeavor.

 

Objectives and Risks

 

Like most investments, mutual funds and pooled investment vehicles add diversification and a needed layer of safety for individual investors to play in the VC space.  Large private companies these days even offer private shares to employees, which have made their way to the market place.  Though no longer true startups, firms including Uber, Lyft, and Airbnb have shares floating among a growing community of private investors.

 

How To Buy or Sell It

 

Funds are the best first option.  Private shares from employees on website exchanges are growing in popularity.  Investing in VC startups is increasingly popular among crowdsourcing entrepreneurs, or accredited investors who pool their funds together.

 

Strengths

 

Stunning (though rare) potential upside

New or game changing markets

Diversification through Funds and growing private websites

 

Weaknesses

 

Illiquid investments

Accreditation needed for actual companies

Low success rates

 

Key Considerations

 

Liquidity:  Low

Historical Returns:  High

Inflation Protection:  Medium


25 Investments: Zero-Coupon Securities
Related Articles
  1. Managing Wealth

    Cashing In On The Venture Capital Cycle

    Find out how VC firms make the market go round, and round and round.
  2. Personal Finance

    How to become a venture capital associate

    Venture capital analysts are junior members at VC firms, but they typically receive compensation that is higher than other finance analyst positions.
  3. Managing Wealth

    How to invest in private companies

    It can be tough to analyze a company that doesn't trade publicly, but there are several advantages to investing in private companies.
  4. Investing

    How to Invest in Private Equity

    Private equity might be a pricey investment, but the payoff could be big. Here's why and where you should invest in private equity.
  5. Investing

    What's the Next Big Thing for Venture Capital? (GOOG, FB)

    Flush with a huge inflow of funds, venture capital firms are cautious about what startups to back. What new technologies are drawing the most VC funding?
  6. Insights

    5 Ways To Get Venture Capital Funding

    Crowdfunding and online networking are just some of the ways you can find venture capital investors.
  7. Investing

    Be Your Own Venture Capitalist With These Stocks

    By doing some digging, there are ways for the average joe to become his/her own venture capital fund.
  8. Managing Wealth

    Private Equity's Returns Are Tempered By Its Risks (BX, KKR)

    Private equity firms adopt approaches to quickly hike up earnings and boost returns, but these investments come with big risks too.
  9. Retirement

    Coming Soon: Private Equity In 401(k) Plans

    The day will soon come when private equity is commonly found among 401(k) plan investment options. Here's who's leading the charge and what to watch for.
Trading Center