Risk Capital

Risk capital is the money an individual or company invests in projects, ventures, or assets that have uncertain outcomes, including the possibility of losing the entire investment. It is the financial cushion allocated specifically for activities where success isn’t guaranteed, and losing the capital is a potential risk. This type of capital is used to pursue new opportunities, innovation, or expansion, understanding that it might not yield immediate returns and that some or all of the invested funds could be lost. Essentially, risk capital reflects an acceptance of higher risk in pursuit of potential higher rewards.