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Important note about these studies: Success = high employee growth from year 0-5 OR fastest sales growth OR successfully exit through an IPO or acquisition VC
by AndrewKemendo 6y ago
Important note about these studies: Success = high employee growth from year 0-5 OR fastest sales growth OR successfully exit through an IPO or acquisition
VC isn't looking at those three factors above. They are looking at LARGEST overall return percentage. VC and the media don't care about 1-30x returns, which is likely where most of these exits are.
HBR should go back and look at the ages of founders that have $1B exits or 100X+ returns on capital if they want to know "why some VCs persist in betting on young founders."
They should likely just consult their colleagues on a different side of their website:
"The average age at founding (a unicorn) in our dataset was just over 31, and the median was 30."
https://hbr.org/2014/04/how-old-are-silicon-valleys-top-founders-heres-the-data https://hbr.org/2014/04/how-old-are-silicon-valleys-top-foun...
- mrits 6y agoIt's sad to realize those unicorn founders aged a few years since their last exit and now worthless
- jjeaff 6y agoOf course, once you hit the lotto once, VCs will keep throwing money at you no matter how old you get.
- jeffreyrogers 6y agoYes, but these other industries employ more people and less skilled people than the tech industry. It's also not very obvious to me that VCs are that good at picking the companies with the largest overall return percentage. The performance of VC as a whole is not that good and arguably the performance of the successful name-brand VCs is due to superior access to deal flow rather than actual skill.