Co-investment in venture capital refers to a situation where multiple investors invest in a startup together. In a co-investment, each investor typically puts in a smaller amount of money than they would in a solo investment, but they still retain an ownership stake in the startup.
Co-investment can be done between venture capital firms, angel investors, or a combination of both. It is a way for investors to spread their risk by investing in a startup alongside other investors. It also allows the startup to secure funding from multiple sources, which can be beneficial for the company's development.
Co-investment can also provide a way for smaller investors to participate in larger deals. For example, an angel investor may not have the funds to invest in a startup on their own, but by co-investing with a venture capital firm, they can still be part of the deal and potentially see a return on their investment.
Co-investment can also serve as a way for venture capital firms to build relationships with other firms and investors. This can be beneficial for future deals and collaborations.