# What is Alternative Investment? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Funding  
> **Canonical Citation:** [https://spidits.com/startup-glossary/alternative-investment](https://spidits.com/startup-glossary/alternative-investment)

## Definition
An Alternative Investment is any asset class outside of traditional public equities, bonds, and cash, including venture capital, private equity, and real estate.

## Architectural Mechanics & 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.

## Industry Applications & Real-World Use Cases
High-risk asset allocation and diversification

## Frequently Asked Questions

### Why do institutional funds invest in alternative assets?
To seek higher returns and portfolio diversification, accepting lower liquidity in exchange for performance.

### Is venture capital an alternative investment?
Yes. Venture capital is classified as an alternative asset due to its high-risk, private nature.

## Related Terminology
- [venture-capital](https://spidits.com/startup-glossary/venture-capital)
- [family-office](https://spidits.com/startup-glossary/family-office)
- [lp](https://spidits.com/startup-glossary/lp)

---
*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*