In common parlance, a venture bet is an investment into a venture which has (a) a possibility of giving superlative returns to the investor; AND (b) a considerable probability of failure. If the venture bet is successful, the superlative returns can be multiple times over the investment. That said, there is a significant risk that you might not be able to recover anything from the investment.
The money you allocate for your venture bet is part of your ‘play money’ or ‘discretionary fund’. Often, a venture bet can be an illiquid investment for some time.
Examples of venture bet:
- Angel investing in an early-stage startup.
- Investing in bitcoin, which we believe is a venture bet as of now.
- Certain leveraged investments, such as margin trading or options trading.
Related information
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