#PrivateEquity
1/ Venture capital is a very difficult strategy.
We are all mesmerized by those few who've achieved success in the area but deal outcomes usually look like this:
• 65% fail with a capital loss
• 25% barely any return
• 6% a good return
• 4% incredible return
1/ Venture capital is a very difficult strategy.
We are all mesmerized by those few who've achieved success in the area but deal outcomes usually look like this:
• 65% fail with a capital loss
• 25% barely any return
• 6% a good return
• 4% incredible return
2/ While 94% of all investments don't have any decent returns, striking a home run (4% of deals) could be extremely rewarding.
Keep in mind successful VC investors usually make their profits in one lump sum — sometimes waiting 5 to 10 years at the time without any cash flow.
Keep in mind successful VC investors usually make their profits in one lump sum — sometimes waiting 5 to 10 years at the time without any cash flow.
3/ Additionally, remember that selling privately owned business in start-up stages is a daunting task.
Sure, in recent years VC trends have become very popular, but traditionally these strategies score very low liquidity ranking. It's not easy to exit.
Sure, in recent years VC trends have become very popular, but traditionally these strategies score very low liquidity ranking. It's not easy to exit.
4/ Understand the risk profile of an asset like venture capital. You shouldn't be allocated to it because its trendy, cool, sexy & fun!
George Soros once said: "If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring."
George Soros once said: "If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring."
