In New Zealand, most investors can't access Venture Capital (VC) investments, either due to the minimum investment size or because the funds are only offered to 'wholesale' or sophisticated investors. Catalist has previously offered VC investments to all investors ('retail' investors as well as wholesale investors). We are currently investigating new VC opportunities for retail investors.

Register your interest in investing in VC funds by logging in and clicking on the "Lean more" button. Alternatively, send us an email and let us know the types of businesses you would like to be invested in.

What are Venture Capital funds?

Venture capital is money that investors put into early-stage companies that have high growth potential but are also risky. By investing through a fund, you achieve a diversity of investments and an expert picks the companies for you. These funds often have access to investment opportunities that you wouldn't otherwise be able to access.

Adding one or more venture capital funds to your investment portfolio can be a smart way to diversify and tap into the high growth potential of startups, which could lead to big returns if the company succeeds. While it comes with risk, since many early-stage companies fail, the potential rewards can be significant if your portfolio includes the right companies.

Why add VC to your portfolio?

Some studies have shown that adding VC investments to your portfolio can increase returns without increasing the overall risk. Research from the Harvard Business School and Cambridge Associates has found that VC-backed assets can enhance the return profile of a diversified portfolio. For instance, one study showed that adding venture capital can boost long-term returns while maintaining similar levels of risk when balanced with traditional stocks and bonds (Harris, Jenkinson, & Kaplan, 2014).

The studies suggest that venture capital, when properly integrated into a diversified portfolio, can potentially offer higher returns for the same or even lower levels of overall risk compared to traditional portfolio allocations. Common suggestions for the percentage of VC assets that should be included in a diversified portfolio range from 2% (for 'start-up' or 'seed' stage companies) to 0% (for 'scale-up' companies).

References:

Harris, R. S., Jenkinson, T., & Kaplan, S. N. (2014). Private equity performance: What do we know? Journal of Finance, 69(5)

Cambridge Associates. (2020). Private Equity & Venture Capital Benchmarks.

Moretta, B., Hardman & Co (2021). How much should clients invest in venture capital?