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> where would $1 have been best invested on March 25, 2015, when Altman wrote his post? Which is an unfair criticism to Altman, because typical VC returns only
by mbesto 7y ago
> where would $1 have been best invested on March 25, 2015, when Altman wrote his post?
Which is an unfair criticism to Altman, because typical VC returns only mature 7~10 years later. If you put $1 into Uber in 2009 and exited at IPO, your returns would far exceed the S&P. This is a terrible financial analysis from Thompson, but I don't think that was his real point from the newsletter anyway.
That being said, the point still stands, investing in venture is generally NOT a good strategy in of itself. The general recommendation is less than 5% of your overall net worth.
- eanzenberg 7y agoThis is weird, because if you are talking about tenor of 10 years, you need to include the 90% of companies that exited at $0.
- exhaze 7y agoOf course you include them - the whole point of VC investing is that even if most of your companies exited at $0, the 1 10,000%+ return made up for it.
- zby 7y agoIt was not a criticism to Altman - I only quote it for veracity - the important part is the data. Altman's bet was that there was no bubble in 2015 and that his unicorn basked would not lose money, and he was right.
- mbesto 7y ago> the important part is the data. Altman's bet was that there was no bubble in 2015 and that his unicorn basked would not lose money, and he was right. But thats my point. This is a terrible analysis bc the data presented is not scoped appropriately to fit the narrative.