When venture capitalists evaluate potential investments, geography often influences their decisions. Market accessibility , the local regulatory environment , and the availability of skilled labor play significant roles.
Fortunately, for venture capital funds with less than $150 million in assets under management, Congress specifically allows venture capital fund managers to register as exempt reporting advisers (ERAs) if they meet certain conditions. ERAs need to register with the (SEC) under a more limited compliance and reporting regime, which simplifies and reduces the costs of running a venture capital fund. Such limited registration obligations are less onerous than the rigorous registered investment advisor obligations imposed on an investment adviser which advises funds other than venture capital funds or which advises separate accounts.
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Angel investors, meanwhile, are usually high-net-worth individuals who invest their own money as seed capital for early-stage startups, often in smaller amounts (tens to hundreds of thousands of dollars). Angel investors typically get involved earlier in a startup's life cycle and are more hands-on in providing guidance and mentorship.
Market risk: The risk of an investment losing value due to fluctuations in the market. Credit risk: The risk that a company or issuer of a financial instrument may default on its obligations. Operational risk: The risk of losses arising from failed internal processes, systems, or personnel within a business.
