Venture capital (VC) managers aim to invest in startup companies that are early in the development stage - often pre-profit - with high growth potential.
Moonfare helps individuals invest in top-tier Private Equity and Venture Capital funds, with over €2.5B in assets under management and growing.
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Venture capital managers provide financing to early-stage companies that have high long-term growth potential.
Venture capital funds make small investments (<$25m), taking minority stakes in a relatively large portfolio.
Venture capital managers take an active involvement, helping to define all elements of the company’s strategy, providing advice and guidance to the board based on their sector and geographic expertise
Venture capital funds generally have a longer holding period, then guide the company through exit at IPO or through an M&A transaction.
Venture capital funds look to finance early-stage companies that have high long-term growth potential that seek to develop and establish their business models. Funds will often specialise in a particular sector or region, to better assess investment opportunities in the space.
Given the lack of cash flow for most early-stage target companies, investment valuation is not as simple as for buyout or growth funds. This - along with the lack of a track record to guide future performance estimates - means that the risk involved in venture capital investing is far higher than later-stage investing.
To diversify away this risk, venture capital funds generally make a large number of small investments. That way, even if most investments in the portfolio fail, the incredible success of a few will more than make up for them in overall return.
¹ For reference only. Moonfare investments are offered in USD and EUR. Minimum investment may vary by country and local regulation.
