What is risk capital (riskkapital)?
Riskkapital is the Swedish umbrella term for capital invested in unlisted companies in exchange for equity. It covers both venture capital, which targets young growth companies, and private equity, which targets mature companies.
Formal and informal risk capital
- Formal risk capital comes from professional players such as risk-capital funds and investment companies.
- Informal risk capital comes from individuals, for example angel investors who invest their own money in early-stage companies.
Why is it called risk capital?
The name reflects that investing in unlisted companies carries high risk: the companies are often young or illiquid, and the investor can lose all of their capital. In return, returns can be high if the company succeeds. The trade body SVCA (Swedish Private Equity & Venture Capital Association) represents Sweden's risk-capital firms.
Risk capital and unlisted shares
As an individual you can access the same asset class by buying unlisted shares directly, without going through a fund.