Building Wealth through Venture Capital

CHAPTER 3Why Should You Invest in Venture Capital?

We love venture capital. For one of this book's authors (Len), it's been my life's work. For the other (Ken), it's been a later‐in‐life interest, as an investor and part‐time strategic advisor, following a more traditional corporate executive career, and even while I continue as nonexecutive Chairman of a traditional, midsized manufacturing company (that makes candy and snack products, including chips that are edible rather than being made of silicon!). And for both authors, who now work together on VCapital, we are pleased to let you know that investing in venture capital has made lots of money for our investors, our partners, and for both authors' families.

But the question we need to answer here is, why should you invest in venture capital? While we've both made money at it, if anyone tries to sell you with promises of guaranteed wealth, don't believe him. As we'll remind you repeatedly, this is inherently a high‐risk asset class. Nevertheless, there are sound, rational reasons for participating, even if you don't consider yourself a big risk‐taker.

It Makes Sense Even for Conservative Investors

This is Ken speaking now. While Len's been at it for almost his entire career, let me tell you why I've been drawn to venture capital investment. You may find parallels in your own situation that make my thinking relevant to you.

I'd characterize myself as being pretty conservative, a “belt‐and‐suspenders type” is how one of ...