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I'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.
by a13n 9y ago
I'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.