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Ask HN: How many Startups do do you need to invest to get a return

• jacquesm 12y ago
  This is an un-answerable question. If you want a large numbers answer then you could look at Ycombinator information and divide the number of startups they invested in by the number of successful startup by your measure of 'successful'. Alternatively, the number is simply '1'. All it takes is one good start-up that you invested in. The problem is to identify a winning start-up before it has reached your goals for success.
• rahimnathwani 12y ago
  This is not a well-formed question, mainly due to ambiguity. Perhaps you mean something like: "In how many startups do I need to invest in order that my chance of making an overall annualised return of x% (where x is 0 or 10 or 20) over y years (where y is 5 or 10) is above z% (e.g. 99)." The above is a question about diversification, and assumes that the quality of startups is constant as you add more to the mix. For this to be the case, you probably need to set some stable criteria to make the investment decision. If you knew the answer to the question, you would need to maintain these criteria. You can't rely on diversification to save you, and just 'spray and pray'. If you aren't selective, your portfolio (and its returns) will be dominated by duds.