One asset, one outcome
In a diversified portfolio, one failure is absorbed by other holdings. In a single-company vehicle there is nothing to absorb it. If the company fails, the units can be worth nothing.
Private companies fail for ordinary reasons: they run out of cash, lose a key customer, miss a regulatory approval, lose a founder, or face a competitor with more funding.
Failure is not the only bad outcome
A company can survive and still destroy investor value through dilutive down rounds, restructurings that reset the preference stack, or a sale price below the money invested ahead of you.
Because there is no market, you may not learn how bad it is until a scheduled valuation or a completed event tells you.
Sizing is the only real control
You cannot diversify inside a single-company vehicle, so the only lever is how much of your overall wealth you place in it. Many investors set a strict cap on total private-market exposure and a much lower cap per company.
Harbor shows a concentration warning in the demo interest flow to illustrate where such a control would sit. It is illustrative, not advice.