The Role of the Investor

Abstract

INVESTORS in venture capital have to accept that it is a longterm business in which they are prepared to have their money locked up for up to ten years in return for the expectation of substantial returns. In effect, the lock-up is less in a well-run firm because the money within a ten year fund is called down when needed over the initial three years and paid out to investors as distributions, when realisations are made, normally in the second half of the fund’s life.