Thread by @Beezer232

We are frequently asked what drives #outperformance for a #VC

To answer this we created a database of enterprise vs consumer performance 📊to spot patterns & analyze returns

🧵to share high level findings, but to dig deeper, download the full report👇

🔗bit.ly/3Cf17Uv

First, let’s define a power law::

We mean that only a small percentage of returns is responsible for a large percentage of overall return value, either for a specific fund or the industry as a whole.

TL;DR: Both enterprise and consumer exits can produce power law returns, but the nature of them vary considerably.

3 Key Points 🔽 🔽 🔽

1️⃣ Portfolio value creation in enterprise tech is often driven by a cohort of exits, while consumer exit outperformance is highly concentrated and dependent on the top deals.

2️⃣ There are more B💲enterprise exits than B💲consumer exits, so there may be more opportunities for a 🦄 outcome in the enterprise space than consumer.

3️⃣ How (IPO vs M&A) as well as when a company (and then the VC) exits contributes significantly to value creation.

To dive into the data (plus more findings and awesome charts), download the full report here:

🔗 bit.ly/3Cf17Uv

#OpenLP