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Of equal interest is author's other paper entitled "How Do Venture Capitalist's Make Decisions?" And after 900+ interviews it's neither jockey nor horse nor any

by indescions_2017 9y ago

Of equal interest is author's other paper entitled "How Do Venture Capitalist's Make Decisions?" And after 900+ interviews it's neither jockey nor horse nor any other correlation, but spray and pray all around. Am currently negotiating a small ($10k) angel investment in an ecommerce startup in Indonesia. All "go" signals are there: ambitious team, growing market, outside foreign investment, etc. But as far as calculating a probability for any IRR? 50% it goes to zero, 50% chance 10x or better return, is as good as any model for the risks faced at early stage. So what was the data point that finally tipped the scale for me to pull the trigger? The fact that in Jakarta you can hire a fresh, world-class engineering graduate for $500 a month to come work for you!

cshenton 9y ago
50% seems like pretty optimistic odds for an angel investment.
- ingenuous2 9y ago
  in general, but with just a $10k angel, the odds of becoming a $100k company are pretty decent.
  - dieterrams 9y ago
    A $100k company could only be a 10x return for a $10k investment if that investment was for 100% of the company.
linkregister 9y ago
> The fact that in Jakarta you can hire a fresh, world-class engineering graduate for $500 a month to come work for you! That's nuts, considering English teachers make about $1000 per month. Then again, there's such a dearth of opportunity for talent in Indonesia that I don't doubt your figure at all. I can't count how many engineering graduates from Bandung I met who are low-skilled office or vocational careers. I noticed you didn't mention government connections to the startup. At some point they need to either pay unsustainable bribes or call a highly-placed friend or relative to stay in business, or so I have been led to believe. Jakarta is an amazing city. I would love to use a product developed in Indonesia. I hope to see that startup's Show HN sometime soon.
- indescions_2017 9y ago
  Will definitely post 6 months or so from today! And maybe in a year you can buy my shares ;) For now, check out this interview with Adrian Li, partner at Convergence Ventures, dedicated to seed investments in Indonesian startups, as well as their portfolio: Video: Indonesia is the next hyper-growth market https://www.kauffmanfellows.org/video-indonesia-is-the-next-hyper-growth-market/ https://www.kauffmanfellows.org/video-indonesia-is-the-next-... Convergence Ventures | Companies http://www.convergencevc.com/companies/ http://www.convergencevc.com/companies/

cshenton 9y ago

50% seems like pretty optimistic odds for an angel investment.

ingenuous2 9y ago
in general, but with just a $10k angel, the odds of becoming a $100k company are pretty decent.
- dieterrams 9y ago
  A $100k company could only be a 10x return for a $10k investment if that investment was for 100% of the company.

linkregister 9y ago

> The fact that in Jakarta you can hire a fresh, world-class engineering graduate for $500 a month to come work for you! That's nuts, considering English teachers make about $1000 per month. Then again, there's such a dearth of opportunity for talent in Indonesia that I don't doubt your figure at all. I can't count how many engineering graduates from Bandung I met who are low-skilled office or vocational careers. I noticed you didn't mention government connections to the startup. At some point they need to either pay unsustainable bribes or call a highly-placed friend or relative to stay in business, or so I have been led to believe. Jakarta is an amazing city. I would love to use a product developed in Indonesia. I hope to see that startup's Show HN sometime soon.

indescions_2017 9y ago
Will definitely post 6 months or so from today! And maybe in a year you can buy my shares ;) For now, check out this interview with Adrian Li, partner at Convergence Ventures, dedicated to seed investments in Indonesian startups, as well as their portfolio: Video: Indonesia is the next hyper-growth market https://www.kauffmanfellows.org/video-indonesia-is-the-next-hyper-growth-market/ https://www.kauffmanfellows.org/video-indonesia-is-the-next-... Convergence Ventures | Companies http://www.convergencevc.com/companies/ http://www.convergencevc.com/companies/