Venture capital funds focus on early-stage startups with global potential before these companies become profitable. Therefore, venture capital is riskier but also has a higher expected return. The most typical sectors are tech, AI, e-Commerce, life sciences, clean energy, etc. These funds typically don’t pay out annual dividends; instead, they focus on maximizing return at the exit. Risk profile is high risk and high expected return. Fund term is typically on the longer side, 8-10 years.
- Higher potential upside than other fund types
- Possibility to invest in early-stage unicorns
Note:
- Typically more downside than other fund types
- Your investment is typically locked in for longer compared with other fund types
- Can be difficult to evaluate the funds without industry expertise
Golden Visa
Venture Capital Funds are a very popular way of investing to obtain Portugal’s Golden Visa. The minimum investment is 500 thousand Euros. You can split the invested amount into several funds to diversify and reduce your risk.
Diversification
Funds are a great way of obtaining diversification because the fund will invest in a pool of assets and not just in one asset like you would probably do if you would invest in real estate.
Venture Capital Funds in Portugal are regulated and closely supervised by Portugal´s Securities and Exchange Commission (CMVM). Funds are audited by an external auditor, usually by a major international audit firm.
Source/Credit: Nomad Gate
