The venture capitalist anticipates that a few of those investments will provide an extremely healthy return - however a few of the investments might not provide any return and some will produce an average return. Historical data shows that an average return from a venture capital fund produces a higher return than other asset classes. The concept the greater the risk, the greater the reward prevails in the venture capital industry. Most venture capitalists have a fiduciary responsibility to their investors. The angel investment community is an informal network of investors who invest in companies for their own interests.
Venture capital is a subset of the larger private equity asset class.
The private equity asset class includes venture capital, buyouts, and mezzanine investment activity. Venture capital focuses on investing in private, young, fast growing companies. Buyout and mezzanine investing focuses on investing in mature companies. In recent years, we have seen an increase in venture investing by corporations. Corporate venture capitalists often co-invest with traditional venture capitalists.