The central point of the post below is that risk is the product of venture capital, and some managers understand that better than others. Many of the replies talk about the futility of 'financial engineering', and how concepts like portfolio construction are less relevant to early stage VC due to the greater... See more

This is never how it actually happens, but you get the idea. Startups should receive risk capital to literally derisk certain aspects of the business.

However, over the last decade or so, something shifted. Traditional venture funds that specialized in early-stage risk started to add buckets of “growth equity” that were supposed to be utilized for... See more