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Msg  479299 of 490442  at  1/30/2023 10:01:15 PM  by

hf6e


 In response to msg 468532 by  Luckyone581
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Re: Off-topic. Very Interesting Day

raising $10 million dollar per group with each group having 10 start up companies in them, meaning that the investors will not just be working with one company that needs to hit in order for he investors to make a profit but with 10 companies. If only 1 of the companies makes it big,
---------------------------
If we are talking about real **startups** with a typically 90% failure rate and 1% 
"unicorn" rate, then a group of 10 companies is not enough to diversify and
compensate for risk.
You probably need a fund of 100. This means that your friends as long as they keep
spinning new funds (groups of 10 companies) will have the statistics on their side,
but individual investors in one fund, on the average will be losing their shirt.
 
 
 
 
 

A startup usually has two important characteristics:

  • Innovation: A startup is testing assumptions that haven’t been tried before – sufficiently new technologies, products & services, or markets.
  • Growth: A startup has the potential to grow exponentially rather than linearly. It is scalable. This usually happens because technology provides leverage (usually, a marginal cost of production close to 0).

So, a startup is in essence, a business experiment with potential. This means that real startups are prone to failure by definition.

 
https://www.failory.com/blog/startup-failure-rate 


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Replies
Msg # Subject Author Recs Date Posted
479310 Re: Off-topic. Very Interesting Day Luckyone581 0 1/30/2023 10:39:48 PM
479314 Re: Off-topic. Very Interesting Day Wilk 0 1/30/2023 10:58:47 PM




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