Risk vs Return

Investing in either startup or small businesses is inherently risky, and you should never invest more than you can afford to lose. That being said, carefully selecting a diverse portfolio can generate significant returns.

Although limited empirical evidence exists relating to returns from seed and angel investing, the NESTA Siding with Angels (2009) report offers a perspective of historical returns, with 1,080 angel investments analysed between 1998 and 2008 generating an IRR of 22%, outstripping the gains available from many other financial investments.

VentureFounders actively monitors and manages investments on your behalf and as part of that process we look to maximise returns for investors.

If a business you invest in is successful, it is likely that the return will have been realised via:

  • A flotation / public offering, whereby the company has grown to a scale where they could list on a public exchang
  • A trade sale, where all or part of a business is acquired by another player in the same industry
  • A sale to a financial backer, where the business is sold to a venture capital or private equity firm to take the company to the next stage of development
  • Through dividends, where investors share in profits while retaining their equity ownership