Holding different types of investment vehicles brings diversification to a portfolio, hence, tends to reduce the structural risk. Each investment class has its own risk profile and return investment characteristics.
When the portfolio management comes to ownership investments like equity, or shares, into a technological company, it’s a wise advice to request an advice. The question to ask is “how will the capital be used for the process of value creation”, and how sustainable is it when considering that it needs to grow in value.
Behind this question is the fundamental of good practice for the capital investment: what part of risk am I prepared to give away, for which performance, knowing that the risk tolerance is correlated with the financial goals.
Depending on the expectation, whether a strategy for growth, value or income, the technological investment is somewhere on the risk ladder as: adapted, at risk or not suitable at all. Making sure the asset contains the appropriate characteristics is important before setting a term sheet.
Request the advice of a technology specialist. Do not expect him to put any figures on the target investment. But expect him to understand the process of value creation and report if attractive or not.