Although all venture capitalists claim they add value, the value actually added ranges from minimal to substantial. There is no doubt that your monitoring system will have a direct impact on your portfolio. Although monitoring cannot turn a bad deal into a good deal, it can definitely keep a bad deal from becoming a total loss and a good deal from becoming an average deal. This aspect is critical enough to deserve an entire article in the future. Geographic Preferences Investing in a venture that is not within close proximity adds another level of risk.
Large funds can afford to do that.
It is less suitable for a small fund to invest in a company that is located on the other side of the country, unless you are relying on a lead investor located in the same city as the venture. The advantage of being the lead investor is that you can control the deal and watch your investment. There is no harm in following if you have confidence in the lead investor, provided that he knows what he is doing. It is always advisable to syndicate a deal. Upcoming articles will present more details about reviewing business plans, analyzing deals, approaching due diligence, and assessing risk.