3 ms·
Does anyone care to guess how many of these will return the principal? How many will turn a profit? Of those that turn a profit, how many will be engaging in so
by bwestergard 8y ago
Does anyone care to guess how many of these will return the principal? How many will turn a profit? Of those that turn a profit, how many will be engaging in some form of regulatory arbitrage (i.e. Uber and labor/taxi regulation)?
- dmritard96 8y agolots of literature is available on this (granted, not always clear what their source of info is). In general, many funds at that stage are playing the unicorn game (and many raising 100M are already a unicorn or at least not too far away). Unicorn economics is basically, 1/10 will hit >1B in value while X% will be mediocre outcomes and Y% will fail. The 1 unicorn will return the fund generally speaking, after accounting for X, Y, opportunity costs (this is high given the strength of the markets lately) and interest.
- mywittyname 8y agoI don't think the ultimate goal for many of these startups is to make a profit. I think most investors are expecting to be acquired by a tech giant at a huge premium.