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Venture fund

Venture fund is a type of investment fund whose strategy is aimed at long-term investment in innovative technologies

As a rule, venture funds invest in young projects with a very high level of risk. Most of them do not live up to expectations. However, some innovative technologies are successfully developing and bring profits many times greater than the amount of money originally invested.

Most often, companies, banks and pension funds act as investors. Part of the money is contributed by the venture company itself, which creates the fund. Then each fund manager chooses his own selection strategy. Some prefer to focus on investing their partners who have invested in the fund. Others - in a specific industry or technology. Recently, venture capital investment in the crypto industry has been gaining popularity. For example, crypto exchange FTX launches $2 bln venture fund.

Investment objects:

A Venture company is a small business engaged in R&D or other science-intensive activities that make risky projects happen. Venture is external and internal. An internal venture is organized by the authors of the idea and the venture entrepreneur. An external venture is engaged in raising funds for the implementation of risky projects through pension funds, funds from insurance companies, savings from the population, funds from the state and other investors. An example here is the crypto company FTX: cryptocurrency exchange raised more than $400 million in its first round of financing. Major investors were Japan's SoftBank Group Corp and Singapore's Temasek Holdings.

Venture finance is a risky business aimed at using technical and technological innovations, scientific achievements that have not yet been used in practice. This type of financing is associated with a high risk of non-receipt of investment returns. Venture business is most often engaged in small enterprises, organized mainly in high-tech areas of production, developers of new technologies, and scientific research.


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