Systemic risk is a risk that can cause the financial industry to collapse. VCs are not a systemic risk they are only $28 billion in size, are positively exposed

Systemic risk is a risk that can cause the financial industry to collapse. VCs are not a systemic risk they are only $28 billion in size, are positively exposed to extreme market moves and are not leveraged. With a VC investment the most you lose is your initial investment. With any form of leverage you can possible lose more then your actual investment and are negatively exposed to extreme moves in the market. If a VC's principles are leveraged up that still does not change the systemic risk exposure of the VC fund. The institutional investor is the one carrying the systemic risk.