Two things: 1) I would assume that you can invest at the same level of risk at existing public company (e.g. micro cup, or investing in options), the this poin

Two things: 1) I would assume that you can invest at the same level of risk at existing public company (e.g. micro cup, or investing in options), the this point is mute. 2) core pillar of modern finance is portfolio theory . I.e. how to mitigate a specific company risk by investing in portfolio of companies (which is what VCs are essentially doing). Hence, this would also imply here (regardless of the amount of audit employed). So really a risk of a single company is a non issue.