Accessibility to individuals is finally here, though, through the establishment over the past few years of several online venture capital firms, including Angel List, Our Crowd, Funder’s Club, Circle Up, and VCapital, founded by one of the authors (Len), with the other (Ken) serving in an advisory capacity. These online firms generally offer both individual investment deals and pooled investment funds.
Some of the firms perform extensive due diligence for greater selectivity in the investments they offer while others appear to perform somewhat less. Some of the firms have extensive experience in VC investing and some considerably less. Since online VC investing is so new, these online firms have little return history or realized IRR performance data based on actual exits to provide an investor with confidence. So the individual investor needs to understand the features and makeup of a likely home run investment, and how to track them down, or more realistically recognize the venture capital firms that have the ability to find those home run opportunities.
Ken Freeman is the co-author of:
Building Wealth through Venture Capital: A Practical Guide for Investors and the Entrepreneurs They Fund