• Venture capital funds manage pooled investments in high-growth opportunities in start-ups and other early-stage firms.

  • Hedge funds target high-growth firms that are also quite risky. As a result, they are only available to sophisticated investors who can handle losses as well as illiquidity and long investment horizons.
  • Venture capital funds are used as seed money or “venture capital” by new firms seeking accelerated growth, often in high-tech or emerging industries.
  • Investors in a venture capital fund will benefit when the portfolio company leaves it as a result of an IPO, merger or acquisition.