Venture capital investments typically involve unsecured loans to startups that cannot raise funds through other means. If the startup fails, the venture capitalist will lose their investment. If the startup successfully goes public or gets acquired by an established company, however, the investor could receive substantial returns. Venture capitalists usually expect a significant role in overseeing operations in exchange for the higher level of risk. These investments are best suited to situations in which the investor can afford to wait for their return, and when the company has developed a groundbreaking concept or product.