Direct Investment
Categories: Investing
A super wealthy bazillionaire family loves venture capital. They usually invest through formal venture capital companies that are set up as General Partnerships, where they as the investor are a Limited Partner. The venture company then invests in two kids in a garage in Palo Alto who are building, say, a flying car. With Pandora.
But in the C Round, the idiot nephew of the patriarch of the bazillionaires wants to invest directly in FlyMeToTheRuins, so he invests $3 million in that round. That $3 million is a direct investment into the company rather than an indirect one, as would be done via the family's investment in the venture capital fund.