High Failure Rate: Most startups fail within the first few years, making it a high-risk investment with low chances of success
Liquidity Risk: Startups often have limited exit opportunities, meaning your investment could be tied up for years without the ability to sell
Valuation Uncertainty: Early-stage companies often lack historical financial data, leading to uncertain and potentially overinflated valuations
Market Risks: Startups may struggle to gain market traction, face competition, or fail to address a real consumer need
Regulatory Challenges: Startups, especially in emerging industries, may face legal and regulatory hurdles that can impact their growth and profitability