How to Maximize Returns and Minimize Risk in Venture Capital


The Venture Capital industry, and early-stage investing in general, requires an ability to judge future success with limited current information. The outcome, more often than not, is failure. Why then, do VCs and Angel Investors limit themselves to investing in only a select few companies, instead of spreading out risk across a more diversified portfolio in an effort to find more winners?There exist many challenges to converting from an active, high conviction, and concentrated investment philosophy into a passive, diversified approach. In this paper, we address these challenges in an attempt to understand what, if any, possibility exists for early-stage investors to adopt this investment style.

Open Research
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