Re:Sell your startup for half a billion and get nothing (2021)
by godzillabrennus on Tuesday March 05, 2024 @07:54AM
(#39602684)
There are motivations beyond return. Alignment of capital with values to support a team/product/service that you believe will help in a manner you care about.
Re:Sell your startup for half a billion and get nothing (2021)
by vidarh on Tuesday March 05, 2024 @09:53AM
(#39604162)
Yes, but those investments are not coming from "VC funds". At least not ones marketing themselves as such.
Re:Sell your startup for half a billion and get nothing (2021)
by santoshalper on Tuesday March 05, 2024 @12:35PM
(#39606652)
There are plenty of outcomes for an investment that sit between "S&P 500 Index" and "Unicorn Startup", and in fact most PE feeds in that range. But VCs are running the casino model where the law of large numbers works in their favor.
Re:Sell your startup for half a billion and get nothing (2021)
by lotsofpulp on Tuesday March 05, 2024 @06:31PM
(#39610442)
> Anyone can get S&P 500 returns with little to no risk.
Unless it’s buying SP500 index funds, I doubt it. Especially the last 15 years.
I know quite a few people who would have been further ahead (financially) if they had just invested in SP500 and retired.
Re:Sell your startup for half a billion and get nothing (2021)
by rightbyte on Tuesday March 05, 2024 @06:46PM
(#39610558)
Even beating the nominal index is hard, since losing companies just drop out and are replaced and you will own stock in them and not in the ones taking their place.
Re:Sell your startup for half a billion and get nothing (2021)
by highwaylights on Wednesday March 06, 2024 @01:31PM
(#39619266)
> Unless it's buying index funds.
I mean literal index funds.
Re:Sell your startup for half a billion and get nothing (2021)
by lotsofpulp on Wednesday March 06, 2024 @01:59PM
(#39619749)
Oh, sorry, I thought you meant operating a business that does not “swing for the fences” (as opposed to ones that do that are attractive to VC).
Anyone can get S&P 500 returns with little to no risk. That’s not to say they won’t lose money but it’ll be market returns either way, will be very liquid, and readily transparent to the holder.
Given the risk involved in early stage investment the maths just don’t make sense for an investor to shoot for anything short of the moon.
tldr; Seed funding / early stage investing is closer to lottery tickets and Vegas than to your 401k.