Basic VC Maths – Part 2

Techcrunch published a story yesterday analysing a set of billion dollar US startups (“unicorns”) created over the past decade.

Aileen Lee, founder of Cowboy Ventures, penned the post to analyse what the 39 startups and their founders, she and her team had identified, looked like.

There’s some interesting data there and it’s well worth checking out.

For startup founders, however, the most interesting comment comes not from Lee but from Fred Wilson. In a post on his blog that looks at the data in the TC post, he makes this critical observation (highlight is mine):

This (looking at “unicorn” data) is a very useful exercise in the VC business since it is these big wins that produce the vast majority of returns in the business. I am not sure it is that is worthwhile exercise for entrepreneurs since you can bypass the VC business entirely, keep all or most of your company, and sell it for $20mm and have a big personal and financial success. That’s another way of saying that focusing on the huge wins is something VCs do, will keep doing, and need to do, but it can be a colossal waste of time and energy for everyone else. Unless, of course, you raise money from VCs. In which case, you are getting into the game and will be impacted by it.

Check out this link for Basic VC Maths – Part 1

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One comment

  1. Pingback: Basic VC Maths – Part 3 | interesante

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