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39 sats \ 3 replies \ @SimpleStacker 4 Jan \ parent \ on: The Economic Impact of Venture Capital: Evidence from Public Companies econ
Are you referring to the venture investor, the startup, or both?
But yes, that long runway to profitability seems like a huge challenge that would put off most people
I mostly meant the investors. They need a few very definitive outcomes which tend to happen slowly (although there are probably signs the outcome is happening). Startups want those outcomes, but aren't diversified enough that they're expected to get one. That's my sense at least.
To put it another way, great founders can fail by making one bad decision. Great investors often succeed by making one really good decision every few years. So for a long time, a soon-to-be great investor will mostly look like a failure.
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what is the success rate for a VC? 5 or 10 percent?
You will have more failures than successes but the one success can 10x or 100x or more
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I'm in the arena, but I'm seated in the nose bleeds, so I couldn't tell ya. I'm just mouthing off for the most part.
But, the few early stage investors that I'm aware of are considered world class for having invested in 2-5 unicorns early. It's like one unicorn is rare, and getting one is perhaps luck, but two or more means you have a secret.
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