What is Alternative Investment?
Alternative Investment
An Alternative Investment is any asset class outside of traditional public equities, bonds, and cash, including venture capital, private equity, and real estate.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding Alternative Investment helps founders model equity distributions when structuring rounds for high-risk asset allocation and diversification.
Detailed Deep Dive
An Alternative Investment is any asset class outside of traditional public equities, bonds, and cash, including venture capital, private equity, and real estate.
Frequently Asked Questions
Q:Why do institutional funds invest in alternative assets?
To seek higher returns and portfolio diversification, accepting lower liquidity in exchange for performance.
Q:Is venture capital an alternative investment?
Yes. Venture capital is classified as an alternative asset due to its high-risk, private nature.
Quick Facts
- CategoryFunding
- Key ApplicationHigh-risk asset allocation and diversification
Coverage Trend12 Weeks
Related Startup Terms
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