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(I am not a finance guy so pardon my dumb question ) How do do startups serve decorrelation of fund portfolio? Startups valuation has to have some degree of co
by manishsharan 9y ago
(I am not a finance guy so pardon my dumb question )
How do do startups serve decorrelation of fund portfolio? Startups valuation has to have some degree of correlation to the industry they serve. By this I am supposing that if you have a healthcare startup, its valuation would be strongly related to the performance of the healthcare sector. So if you have say healthcare stocks in your funds' portfolio, would investing in a healthcare startup serve decorrelation ?
- closeparen 9y agoThat is why you invest in a VC who invests in a number of startups in different industries.
- georgeecollins 9y agoStartups often don't correlate very well with the industry they are in because they usually don't have the same business model. So I don't think Uber correlates with to transportation stocks, or Air BnB correlates to resorts, or 23 me correlates to Pharma etc. There is a cycle to start ups, but it is related to the broader economic outlook and the price of capital.