4 ms·
(PhD Finance here) Even classical 70s-era finance is against this article: Rich investors don't need their VC to be super diversified. They can just invest int
by zzleeper 6y ago
(PhD Finance here) Even classical 70s-era finance is against this article:
Rich investors don't need their VC to be super diversified. They can just invest into multiple VC funds and get diversification that way.
Also, it doesn't matter how much risk is in a given VC fund, what matters is how investing part of my porfolio in that VC fund affects the risk of my portfolio!
- Tomminn 6y agoThis was the first thing that occurred to me. Why do they need the VC firms to change from an investment perspective? Just buy the asset class as a whole. The lesson is VC funds are more like individual stocks than index funds from an investment perspective. Which is fine. In fact VC funds as a class are like a great class of individual stocks, from an investment perspective. The problem isn't from an investment perspective at all. It's from the VC perspective. VC's which invest in small numbers of companies are trusting the future of their fund on the role of a dice. That is risk they might want to eliminate for their own good.