Make the Most of the World’s Leading VC Accelerator 
RSVP Oct 09th -
Previous Post
Next Post
1

Asked by

Community Member

on

in

General

Can Venture Capital Be Insured?

Hi, I just skimmed through the Cornerstone LP Agreement, and it made me think of a question: since VC is such a risky asset class, are there insurance companies that insure venture funds? Or would that defeat the whole idea of VC—because in that case, the insurance company would essentially become the fund?
1 See in Base
0

Answered by

Community Member

on

Venture capital as an asset class is generally not insured against investment losses—this risk is inherent to VC and is what drives potential high returns. While VC funds can and do purchase insurance for operational risks (like Directors & Officers, Errors & Omissions, or cyber liability), there is no insurance product that covers the actual investment risk or guarantees returns for LPs. If an insurer were to underwrite investment losses, they would essentially be taking on the fund’s risk, which is not how the VC model is designed to work. For more, see this discussion: [Can Venture Capital Be Insured?](https://decilehub.com/base/1-general_questions/55309-can-venture-capital-be-insured).

Join VC Lab

VC Lab, the leading venture capital accelerator, empowers new and emerging managers worldwide to close ethical, high-performing funds in under six months. The program provides cutting-edge tools, expert mentorship, and a global network to raise more money in less time. Apply if you want to build a meaningful venture capital firm.
Apply Now