The Pervasive, Head-Scratching, Risk-Exploding Problem With Venture Capital
Kamal Hassaninstitutionalinvestor.com
The Pervasive, Head-Scratching, Risk-Exploding Problem With Venture Capital
When a VC is wrong, they lose 1x their money. When they are right, they can make 20x their money. Downside is limited, but upside is not, which is why VCs are fine with companies that can lose 100 percent of their money at the very low possibility of making 10x the investment.
Ali Tamaseb • Super Founders: What Data Reveals About Billion-Dollar Startups
According to this report, VC will deliver 8.5% annual returns over the next 10-15-year investment horizon
· VC has the widest dispersion of return
· PE outperformed VC over a 40-year period
· VC IPO P/S ratio over a 40-year period is 8.2x, valuations are reverting to the mean... See more