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Also true, though their LPs do get paid only on the profits (less the aforementioned management fees). If they weren't comfortable with the risk, they wouldn't
by aston 18y ago
Also true, though their LPs do get paid only on the profits (less the aforementioned management fees). If they weren't comfortable with the risk, they wouldn't invest, right?
- mattmaroon 18y agoYeah, though they can invest in many high risk VC funds much the way VCs invest in many high-risk startups. Harvard's endowment, for instance, is ~$35 billion. They're risk-tolerant on a level that Sequoia can only have wet dreams about. So though VCs will be less risk-tolerant due to sample size than entrepreneurs, LPs will be that much less than VCs. Even the best VC firm is only a few poorly-performing funds away from the scrap heap.