Sufficient Returns at Acceptable Risk
Investors in venture capital funds are typically very large institutions such as pension funds, financial firms, insurance companies, and university endowments—all of which put a small percentage of their total funds into high-risk investments. They expect a return of between 25% and 35% per year over the lifetime of the investment. Because these investments represent such a tiny part of the institutional investors’ portfolios, venture capitalists have a lot of latitude.
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I am passionate about Investment and most importantly investing in businesses directly. Had a conversation with the VC Lab on the formation of my new Venture Capital firm and I needed to compare my fundraising strategy with what I can find on the internet, and that led me to this article by Harvard Business Review (One of my favourite places to go lol)
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Sufficient Returns at Acceptable Risk
VC funds have investors in large institutions like pension funds, insurance companies and financial giants. They place only a small fraction of their funds into startups and high-risk investments.
More than good people or good ideas, VCs look for good industries to invest in.
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The venture capital partners agree to return all of the investors’ capital before sharing in the upside. However, the fund typically pays for the investors’ annual operating b...
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