Investing in Venture Capital Investment Funds: Risk, Return, and Exit Strategies

Venture Capital Investment Funds (GSYF) are investment vehicles that support the growth of early- or growth-stage companies with high innovation and transformative technology potential. They offer investors the chance for substantial financial returns by investing in the companies of the future.

What is a GSYF?

Venture Capital Investment Funds (GSYF) are investment vehicles that support the growth of early- or growth-stage companies with high innovation and transformative technology potential. They offer investors the chance for substantial financial returns by investing in the companies of the future.

From a legal standpoint, a GSYF is defined as a non-corporate asset pool established for a set term by portfolio management and venture capital firms authorized by the Capital Markets Board (CMB). It collects funds from qualified investors in exchange for fund shares and operates under fiduciary ownership principles, investing in startups and other financial instruments permitted by legislation.

Why GSYF?

Although Turkey's first “investment fund” dates back to 1987, the concept of GSYF was formally introduced with a regulation published on January 2, 2014. Despite its relatively recent history, GSYFs have gained significant traction in recent years. According to the Startups.Watch Turkey Startup Ecosystem Q1 2025 Report, as of the first quarter of 2025, 481 GSYFs have been authorized, including 92 Corporate Venture Capital (CVC) funds.

The surge in GSYF interest stems from the rapid expansion of the entrepreneurship ecosystem in Turkey and the tax incentives offered by the government. As traditional investment instruments increasingly fall short in meeting the evolving financial needs of investors, those with a long-term outlook are turning toward alternative investment areas like GSYFs, particularly in future-focused sectors such as technology.

Investing in a GSYF—managed by experienced institutions—can yield better results than directly investing in startups or buying shares in tech companies. Even professional investors prefer funds due to simplified operations and the opportunity to gain diversified exposure.

Which GSYF to Choose?

Despite the growing number of GSYFs, new investors or institutions often face confusion regarding how to choose the right fund. Here are several critical selection criteria:

Theme

GSYFs can be thematic—focusing on a specific industry—or sector-agnostic. For example, a business owner in the healthcare industry may prefer a fund investing in health tech startups.

Popular themes among investors include AI, energy, sustainability, biotechnology, and climate tech. Sector-agnostic funds appeal to those who prioritize criteria like fund duration, dividend policies, investment stages, and expected returns.

BV Portföy’s thematic positioning:

• BV Growth: Invests in gaming, healthtech, retail tech, edtech, and HR tech.
• BV Growth II: Focuses on AI-driven transformative startups.
• BV Sinerji: A sector-agnostic fund co-investing in a wide array of tech ventures.

Term (Duration)

Unlike traditional investment funds, GSYFs have finite durations, liquidating upon expiry to return capital to investors. Depending on the fund strategy, terms may range from a few years to over 15 years. Although shares may be sold mid-term, fund performance typically peaks at final liquidation.

Key duration factors include the startup stage and number of investments. Early-stage and multi-asset funds tend to take longer to exit, while later-stage, single-asset funds (e.g., pre-IPO) may liquidate in 3–5 years.

BV Portföy fund durations:

• Joygame Pre-IPO: Targets Turkey’s first gaming IPO, expected to exit by 2026–2029.
• Liquidity Trading Pre-IPO: Invests in Turkey’s first HFT firm planning an international IPO in 2027.
• BV Growth: In its 5th year, exits have begun; full liquidation expected in ~4 years.
• Sinerji: In year 3, with ~7 years remaining. Annual dividends planned starting 2026.

Risk and Return

While once referred to as “Risk Capital,” GSYF is fundamentally driven by technological innovation—not speculation. GSYFs aim to offer long-term, high returns at optimal risk levels, with gains stemming from innovation-led efficiency.

The fund manager’s expertise is critical in evaluating risks and potential returns, especially in tech sectors requiring deep know-how. While many institutions jump on the GSYF trend, not all are equipped to handle the complexities of tech investment.

BV Portföy, led by founders with entrepreneurial backgrounds and experience evaluating over 10,000 startups, is one of Turkey’s most seasoned GSYF managers.

Regardless of investment motive, the ultimate goal is financial return. As expected, higher risk often correlates with higher potential returns, particularly in early-stage investments where GSYFs may hold significant equity.

Average performance expectations (USD-based):

• BV Growth: ~32% annual return
• BV Growth II: ~35% annual return
  • Targets AI startups with sector-transforming potential
  • Offers ~$2M in seed capital for early-stage validation and tech development
• Sinerji: ~25% annual return
• Joygame Pre-IPO: 5x return
• Liquidity Trading Pre-IPO: 5x return

The presence of credible co-investors—such as government bodies, universities, pension funds, or leading corporations—can also validate a fund’s structure and risk/return assumptions.

BV Portföy investors include the Turkish Treasury, major universities, pension funds, local and international investment funds, prominent holding companies, business owners, and professional investors.

Final Word for Investors

Despite Turkey’s dynamic and sometimes challenging market conditions, the country offers exceptionally rich investment opportunities in its rapidly growing startup ecosystem.

GSYFs not only support this ecosystem but also provide high return potential for investors. However, managing GSYFs—especially in tech—requires extensive experience. As more institutions eye this space due to investor demand, it’s vital to assess funds based on maturity, risk/return, and thematic fit before investing.

We recommend prospective investors diversify across GSYFs with varying strategies, after evaluating each fund’s thesis in detail.

For more information on BV Portföy’s investment funds and to identify the right options for your portfolio, reach out to us.

The most effective way to manage your investments securely, diversify your portfolio, and minimize risks is through the expertise of BV Portföy.