For many years, venture capital was limited to a select few – the ultra-wealthy high-net-worth individuals who had direct connections to startups. Now, access has been expanded, opportunities have grown, and investors may have the opportunity to write smaller checks in the startups they want to support. In this blog, learn more about small check investments and how they can help investors diversify their portfolios.

Small Check Investments

A study from VC Lab conducted in 2025 found that of 3,400 Limited Partnership Agreements, the median investor in venture capital is no longer an institution, but rather an individual or smaller entity writing meaningful, but smaller, checks.[1] Key findings from the study include:

• 75% of all investments are below $150,000
• The most common investment bracket is the $100-$150k range, accounting for 29% of all commitments
• 24% of investments are under $50,000

The data reports that fund managers are building funds by aggregating a larger number of smaller commitments. At MicroVentures, most of our investment opportunities have investment minimums under $50k, with some Regulation D opportunities having minimums as low as $5k and Regulation Crowdfunding opportunities with minimums as low as $500. With these opportunities requiring smaller investment minimums, how can investors use these small check investments?

Diversification

The access to write smaller check investments could come with the opportunity to further diversify an investment portfolio. If an investor has $100k they are able to comfortably invest, if their targeting investment opportunity has a $100k minimum, they would only be able to invest in one company. However, if there are four startups that each have a $25k minimum, the investor could invest in all four startups, helping to mitigate risk across those four companies instead of having it concentrated in one startup. And as investment minimums decrease further down to even $5k, the more diversification opportunities may arise, which can be beneficial for power law.

Embracing Power Law

Power law, in terms of venture capital, states that in any given portfolio of startups, a very small number of companies could generate the majority of the returns. Most startups fail, some might achieve modest gains, and a very limited few have the rare possibility of producing significant returns.

If an investor only makes one or two investments, the odds of choosing one of the rare few are very slim. Beyond the potential for “winning”, capital is concentrated in one opportunity that has a very high chance of failing and causing a total loss of capital. Conversely, writing a larger number of smaller check investments can help mitigate risk across the portfolio of companies.

Building Your Diversification Strategy

With lower investment minimums, investors can construct a portfolio that can help mitigate risk across the startups in the portfolio. Consider diversifying across:

• Stage: Allocate capital across seed, Series A, and later-stage deals
• Sector: Invest in a mix of industries like software, AI, biotech, fintech, climatetech, or others
• Geography: Don’t just look at investment opportunities in your backyard, consider investing in emerging startup ecosystems across the U.S. and globally

Beyond Diversification

There are also additional benefits beyond diversification to writing smaller, strategic checks. For example, in that same VC Lab study, while only 9.4% of LPs make repeat investments into the same funds, a small but significant group of 13.7% increase their commitments by an average of 329% in subsequent funding rounds. Sometimes, these small check investments can be used to test the waters of a startup’s growth before making a larger follow on investment.

Additionally, including venture capital in an overall portfolio can be a way to diversify, and accessible minimums in VC opportunities can help an investor allocate a responsible percentage of investment funds to the asset class without ending up on the side of overconcentration.

Final Thoughts

The ability to write small check investments into startups can help investors diversify their portfolio, test the waters before making a larger follow on investment, and help mitigate overconcentration of one asset class, sector, or stage in a portfolio. By strategically deploying smaller check investments into a larger number of startup opportunities, investors can build a diversified portfolio.

Are you ready to invest in startups? Sign up for a MicroVentures account to start investing!

Want to learn more about investing in startups? Check out the following MicroVentures blogs to learn more:

• Startup Consolidation: The Rise of M&A in 2025
• Time to Exit: Are Startups Getting Older?
• Building a Portfolio: B2B vs B2C
• Using Alternative Data to Assess Startups

 

[1] https://govclab.com/2025/06/04/shifting-lp-commitments

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The information presented here is for general informational purposes only and is not intended to be, nor should it be construed or used as, comprehensive offering documentation for any security, investment, tax or legal advice, a recommendation, or an offer to sell, or a solicitation of an offer to buy, an interest, directly or indirectly, in any company. Investing in both early-stage and later-stage companies carries a high degree of risk. A loss of an investor’s entire investment is possible, and no profit may be realized. Investors should be aware that these types of investments are illiquid and should anticipate holding until an exit occurs.