When do I see my realized return?

Realized returns are not guaranteed in start up investing. Most startups go out of business. Private company securities are illiquid and not publicly traded on exchanges or markets, so you will not receive a return on your investment until the fund makes a distribution of cash or securities to you following a liquidity event (in many cases there will not be a liquidity event) with respect to the securities owned by the fund in which you are invested.

A distribution typically occurs either because the company has been acquired by another company or because the company undergoes an initial public offering of its stock on NASDAQ, NYSE, or other exchange. It can take 4–7 years (or longer) from initial investment to see a distribution of this sort, as it takes years to build companies. In many cases, there may not be a distribution at all.