MANCHESTER, NH / ACCESSWIRE / February 10, 2023 / The historical returns of the venture capital industry have supported strategies for long-term planning and financial legacy that feature the asset class prominently.
Planning for the future is crucial for financial stability and security. A win-now approach can be useful in certain contexts, but it shouldn't be the only strategy. A properly diversified and long-term-oriented financial plan can help investors navigate the ups and downs of the market, reduce stress and uncertainty, and ensure that their money is working hard for them. Having a financial legacy means ensuring that not only is the family's financial future secure, but that wealth can be passed down from one generation to the next. This involves making investments and financial decisions that are sustainable and forward-thinking. A financial legacy is about leaving behind financial stability, security, and independence, rather than just wealth.
One way to contribute to a financial legacy is to incorporate venture capital into one's investment portfolio. Venture capital is an asset class geared towards that long-term thinking. Venture is a form of investment that involves funding early-stage startups and helping them grow into successful companies. It's a long-term investment that requires patience, as investments typically take 10 years to fully vest. Venture is often referred to as a high-risk, high-reward asset class, but a properly diversified venture portfolio can help mitigate risks for patient investors.
Venture capital has historically provided higher returns compared to the public markets, making it an attractive investment option for those who are looking for long-term financial stability. According to Cambridge Associates, over the last 25-years dating back from 2020, the average annual return on U.S. venture capital investments was 32.4%, while the average annual return on the S&P 500 was 9.5%. These funds also often have access to a network of industry experts and resources that can help startups grow and succeed. As a result, venture capital funds have tended to generate higher returns than the public markets over the long term.
These outsized returns are reached because venture capital funds invest in the early stages before the startup undergoes the majority of its growth and value creation (after a company goes public, there can generally be less potential for growth). According to BCG's 2022 report, companies were staying private prior to an IPO for 12 years on average in 2020, compared to just 4 years in 1999. Additionally, average valuation at IPO is 8x higher in 2020 than it was in 1999, meaning that enormous value is being created in the private markets and benefiting private market investors.
Working towards a financial legacy can also mean having a plan in place that will help leave a lasting impact on the world. This could include investing in the future of a community, supporting important values or causes, or helping future generations to achieve their own financial goals. By creating a financial legacy, investors can ensure that their money will continue to make a difference long after they're gone, and venture capital allows investors to be at the forefront of innovation and progress. Investing in startups and early-stage companies enables investors to play a role in shaping the future of industries and the economy according to their passions.
"The world today is really driven by the entrepreneurial economy. It has great power to do good," says Alumni Ventures CEO Michael Collins. "By helping startups to succeed, it's possible to play a role in creating new products, services, and technologies that will improve the lives of people around the world. Additionally, investments in venture capital can help create jobs, stimulate economic growth, and contribute to a better future for everyone."
Alumni Ventures takes enormous pride in finding opportunities that transform industries and effect positive societal change. The firm's portfolio is filled with game-changers and high-tech innovations that are disrupting the status quo and making a real impact. From Covid-19 solutions to deep tech leaps, some of Alumni Ventures' investments include companies that are leading the way in their respective fields. For example, startups like Kinsa, Capella Space, and Notable Labs are making significant contributions to fields such as healthcare, space technology, and cancer treatment.
Alumni Ventures' emphasis on diversity in its investments and its extensive network of professional investors located in key venture hubs has enabled the firm to source opportunities that are shaping the future. As a result, Alumni Ventures has become one of the most active venture capital firms in the world, as ranked by PitchBook in 2021. Alumni Ventures' network-powered venture capital and its focus on industry-changing startups make it a valuable partner for accredited investors seeking exposure to this exciting and transformative asset class.
Planning for the future is crucial for financial stability and security. By creating a financial legacy through venture capital investment, it's possible to make a lasting impact on the world, achieve individual and familial financial goals, and help shape the future of industries and the economy.
About Alumni Ventures
Alumni Ventures offers accredited individuals access to network-powered venture capital - a key asset class missing from the portfolios of many sophisticated investors.
CONTACT:
Andrew Mitchell
media@cambridgeglobal.com
SOURCE: Alumni Ventures
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