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If you invest $10M in a company and get back $12.5M after ten years, that's a 2.3% annual compound return. You would have made nearly twice as much (with virtu
by liuhenry 10y ago
If you invest $10M in a company and get back $12.5M after ten years, that's a 2.3% annual compound return.
You would have made nearly twice as much (with virtually no risk) if you had bought a government bond with the money instead.
- mark212 10y agoI agree with your point, but you are vastly overstating the return on government bonds. Current yield on the 30 year is 2.31% and everything with a shorter maturity is way less than that.
- liuhenry 10y agoSorry, I should have been more specific. A VC fund started in 2006 would have gotten around 4.5% return on a 10 year bond. You're right about current yields, but they're also at all-time historical lows right now.
- toodlebunions 10y ago10 year tbill yield is 1.5%