While portfolio diversification is a well-known means to control risk exposure by reducing unsystematic risk it remains unclear whether this strategy truly allows to manage the specific risk characteristics of Venture Capital investments.

However, except for Norton/Tenenbaum (1993) little insight has been gained on investment strategies of Venture Capitalists themselves. This left highly important questions for Venture Capitalists regarding optimal portfolio building and superior portfolio strategies largely unanswered.

My research project thus provided information of use to Venture Capitalists, as they seek information on how best to control risk; to academicians through further insight into general industry practice and should therefore help to initiate further research.