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>They make their returns only on big exits. Don't they make returns anytime their money invested is less than the money gained from the sale?
by jf22 12y ago
>They make their returns only on big exits.
Don't they make returns anytime their money invested is less than the money gained from the sale?
- mhartl 12y agoIn a narrow sense, yes, but virtually all investor returns typically come from a few big winners. For example, although many Y Combinator startups have achieved great success, most of YC's returns come from just three companies: Airbnb, Stripe, and Dropbox. If all an investor's winning startups exited at the ~$10m level, their returns would be anemic at best, and would quite possibly be negative after factoring in losses from failed companies. I think that's what the grandparent comment was getting at.
- psykovsky 12y agoAnd let's be honest, AirBnB will go the way of Uber, regulated out of existance. I honestly don't know why it didn't happened yet, for both.
- sumedh 12y agoNot exactly. There will be couple of other companies in their portfolio which would shut down and the VCs would lose all their money. So they really need a big exit which would make up for all the other losses.