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> That’s what everyone says but how many 100x’s are there really? I’ve been doing this a long time and there just aren’t that many. > I don’t have the same pre
by yinso 9y ago
> That’s what everyone says but how many 100x’s are there really? I’ve been doing this a long time and there just aren’t that many.
> I don’t have the same pressures of a fund in liquidity, timing or the need for 100x returns. If I can consistently get 5x to 10x I’d take that all day long.
How many investors, angels, VCs or otherwise, focus on the 5x-10x return deals?
And are 5x-10x deals safer, meaning that more of a sure thing, than the 100x deals in terms of return? I.e. are VCs being rational by focusing on the 100x deals since 5x-10x deals aren't safer, or are they forgoing safer and better returns of the 5x-10x for the chance to become movers and shakers of the largest players?
- a13n 9y agoI've asked a VC this question before. They said that in theory going after 5-10x returns sounds great but in practice no successful VC firms use this strategy. They all make their money from the few who "return the fund".
- mrep 9y agoWell, I tend to think of VC's as investors who target insane growth companies so that kind of makes sense. One of my good friends works in private equity and their investment targets are 100% focused on small banks who return an average of 2-5x. Not quite the 5-10x returns but they have much higher success rates.
- kornish 9y agoA friend of mine who graduated with honors from an Ivy econ program moved to Palo Alto and went into PE. I asked him why he didn't go into VC in the heart of venture capital. He replied that PE was as close as you could get to formulaically printing money while seed-stage (and even later) VC was more like splattering paint at a wall and seeing what sticks, and that the former suited his personality better. An interesting comparison; food for thought.