Venture Capital by its very nature is a high-risk investment. Companies are generally in their formative years and are in the process of proving their business model, defining their product offering, refining their revenue models and acquiring customers.
The time it takes for entrepreneurs to bed down these variables is the difference between success and failure.
Professional venture capital companies generally have a team of experienced managers who are trained to fast track these important factors.
Section 12J Venture Capital Companies (VCCs) allow investors into the fund the opportunity to deduct the full amount of their investment from their taxable income. This results in an investor who is paying tax at the marginal rate, a net investment of 55%, whilst enjoying 100% of the upside.