October 16, 2009

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Redeye VC: Company Math vs VC Math Great Post… plus this quote is terrific: “it’s even more scary when you look at it from a micro/fund perspective.  Take a $400M venture fund.  In order to get a 20% return in 6 years, they need to triple the fund — or return $1.2B.  Add in fees/carry and you now have to return $1.5B.  Assuming that the fund owns 20% of their portfolio companies on exit, they need to create $7.5B of market value.  So assume that one VC invested in Skype, Myspace and Youtube in the same fund - they would be just halfway to their goal.  Seriously?  A decade ago, any one of those deals would have been (and should have been) a fundmaker!”

Redeye VC: Company Math vs VC Math

Great Post… plus this quote is terrific:

“it’s even more scary when you look at it from a micro/fund perspective.  Take a $400M venture fund.  In order to get a 20% return in 6 years, they need to triple the fund — or return $1.2B.  Add in fees/carry and you now have to return $1.5B.  Assuming that the fund owns 20% of their portfolio companies on exit, they need to create $7.5B of market value.  So assume that one VC invested in Skype, Myspace and Youtube in the same fund - they would be just halfway to their goal.  Seriously?  A decade ago, any one of those deals would have been (and should have been) a fundmaker!”
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  1. bfizzle reblogged this from sourcecontrol and added:
    I wonder if this was driven in part by the mortgage boom. You have all these mortgage-backed securities and other “safe”...
  2. ztaylor reblogged this from thegongshow
  3. sourcecontrol reblogged this from thegongshow
  4. thegongshow posted this

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