Re:Matt Maroon - But Seriously
by aston on Thursday October 16, 2008 @04:17AM
(#334241)
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?
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Re:Matt Maroon - But Seriously
by mattmaroon on Thursday October 16, 2008 @05:37AM
(#334280)
Yeah, 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.