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What is the minimum investment in a typical venture capital fund?

What is the minimum investment in a typical venture capital fund?

Minimum investments in venture capital funds tend to be vast sums of money. They tend to be for $1 million or more but can be as low as $250,000.

As with hedge funds, the minimum investment is very steep and suitable only for accredited investors and qualified buyers. A typical minimum investment in a VC fund varies between $1 to $5 million, but it can be over $25 million.

Most of the investments in venture capital funds are made in terms of commitments: you commit a certain amount of money, and when a venture capital fund finds an appropriate investment, it makes a “call” on you to deposit the money with them, perhaps in increments over a period of several years.

If you are interested in investing lesser amounts than a VC fund minimum, you may be able to find opportunities as an Angel investor, which may also allow you to negotiate your own terms instead of accepting the terms that the VC firm has finalized.

You can find a few databases and services online which may help you find VC opportunities around the country or the world. VC firms tend to target about 20% returns per year on their investments.

Keywords: asset allocation, alternative investments, venture capital, angel investors, minimum initial investment,