In some ways, co-invests may be perceived as riskier. Given that a co-invest offering only consists of a single company, there is inherently concentration risk, meaning the outcome of that single company will solely drive the returns of the overall SPV. Funds, on the other hand,  invest in multiple companies, and investors get the benefit of diversification, which can insulate the impact, both positive and negative, of any single company. 

However, it is important to consider the characteristics of each co-invest offering, such as the size and stage of the company, to truly determine risk. For example, a co-invest in a mature, stable, later-stage company could be perceived as less risky than a venture fund of very early ‘pre-seed’ companies where there is not yet a product or material revenue. 

As with all private investments, the risks are presented in detail in the offering documents listed on each offering’s page. It is important for investors to know that although Allocate fully vets all fund managers and offerings (or pre-offering evaluation), it is each investor's responsibility to conduct his or her own diligence on the offering in evaluating investment suitability.