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What is Adventure Capital?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 20 November 2018
  • Copyright Protected:
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    Conjecture Corporation
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Adventure capital is funding which is provided for humanitarian purposes. The person who provides such capital still expects to see a return on it, but believes in investing in humanitarian causes to further social progress while also making money. Amounts from small to large can be considered adventure capital and there are a number of ways in which people may be involved in contributing capital to causes such as development, humanitarian aid, and community endeavors.

Some large investors dedicate a portion of their funds to humanitarian causes as an act of charity or service. Firms often invest in such endeavors because they wish to improve their public image. Companies which invest in humanitarian service demonstrate that they are interested in improving communities in addition to making money. Very large companies and wealthy individuals may establish separate foundations which provide adventure capital to organizations working on humanitarian assistance projects.

People who invest on a smaller level can also make adventure capital investments. Some people may utilize this investment technique as a way of providing charitable assistance while also making some money, and some people believe that investing in humanitarian assistance does more good than simply donating. Investment schemes often concentrate on empowering the recipients of the assistance so that they can build stronger communities, and this provides long term benefits.

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A classic example of adventure capital is microfinancing, also known as microcredit. In this type of lending, people in the developing world are provided with very small loans which they can use to start projects. Budding entrepreneurs sometimes do not need very much money to get started and microfinancing helps them establish businesses or community projects. Often, the debt is split among a number of small investors to reduce the risks to investors, and the rate of repayment overall is quite high. People can participate in microfinance endeavors by working with companies which facilitate meetups between borrowers and lenders.

The return on adventure capital can vary. One important thing about this type of investment is that in addition to providing financial returns, it can also provide social ones. Some people feel that the humanitarian benefits of such investments can make up for returns which may not always compare favorably to activities like investing in the stock market or in an up and coming company in the developed world which could stand to make very high profits for investors who contributed capital at the start.

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