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My guess is, 500 startups will beat the median VC fund over a long period of time. Perhaps the very best VCs are able to identify winners through their stock p
by vasilipupkin 12y ago
My guess is, 500 startups will beat the median VC fund over a long period of time. Perhaps the very best VCs are able to identify winners through their stock picking skills, or through better access. But I doubt this is true for the median VC.
- pbreit 12y agoI don't think averages are a very good benchmark in venture because the top performes are so easy to identify (a16z, benchmark, founders, sequoia, etc).
- jmsdnns 12y agoThe median VC fund doesn't even beat the S&P. It operates under power laws, so the top 5% get basically the money and everyone else goes broke.
- vasilipupkin 12y agothey don't go broke - they still generate positive returns. I am not sure why they actually need to beat S&P 500. I think this is misunderstanding portfolio theory. As long as they are not perfectly correlated with investors overall portfolios and they have positive returns, it's ok for them not to beat S&P