I had dug a little more after making this thread last year. OVC is kind of a shady deal.
You send your money to a “syndicate,” who invests it (along with other investors’ capital) in one or more projects. The syndicate will often invest some of their own money in the project as well, but either way, gets a commission on YOUR earnings.
However, there is no consequence for the syndicate if the investment fails and goes completely belly-up. “They” can only MAKE money.
A while back, I listened to an interview with a seed investor who also operates as a syndicate with an OVC firm. He admitted that he doesn’t see this system lasting for long.