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A comment on Ask HN: How much money does an average VC make?. Parent comment

Re:Ask HN: How much money does an average VC make? by ricardobeat on Saturday May 09, 2015 @03:46PM (#9517451)
50% over 10 years is less than the stock market average. Take away the fund management fees + interest, and investors get a measly 2% per year. Why would anyone put money in such a fund? Is this a realistic scenario or did you just use these numbers to round out the example?
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Re:Ask HN: How much money does an average VC make? by Dzidas on Saturday May 09, 2015 @04:14PM (#9517547)
Diversification. VC most likely will be more risky or volatile and return of it won't be similar to S&P500. Main idea is to mix different asset classes - S&P500, VC, hedge funds, bonds and etc, to get smooth results during good and bad times.
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Re:Ask HN: How much money does an average VC make? by lisper on Saturday May 09, 2015 @04:03PM (#9517507)
> Why would anyone put money in such a fund?

For the same reason people play any lottery: they don't look at the expected value, they look at the outliers and think, "That could be me, but only if I buy a ticket."

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Re:Ask HN: How much money does an average VC make? by GBond on Monday May 11, 2015 @01:24PM (#9526318)
s/"play any lottery"/"founding a startup"/g
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Re:Ask HN: How much money does an average VC make? by hebdo on Saturday May 09, 2015 @05:48PM (#9517817)
The 50% return is just an input to the model, an assumption.
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