Identifying Characteristics of Venture Capital within Private Equity

Private equity (PE) investments have garnered significant attention in recent years due to their potential for high returns compared to traditional public equity investments. However, the structure and characteristics of PE investments can vary widely. Understanding the different stages of private equity and the investment strategies associated with each stage is crucial for investors evaluating these opportunities.

Which of the following describes a characteristic unique to venture capital (VC), a specific subtype of private equity investments?