Of course, many venture-backed companies will fail, and that can mean significant loss of capital. According to industry analysts, at least three out of every 10 start-ups will fail. As many as six may survive and do moderately well in the marketplace. On average, only one in 10 will be hugely successful, but that is often enough to generate attractive returns for the entire portfolio. Of course, prior results are not indicative of future performance.
Venture capital is a long-term investment.
A typical venture fund can take 10 to 14 years to reach liquidation stage, and there is no secondary market for shares. Venture capitalists understand that profits from technological advances usually do not come overnight.