Why VCs Love Unicorns - Deepstash
Why VCs Love Unicorns

Why VCs Love Unicorns

The test of any investment is the ratio of return to risk. Startups pass that test because although they're appallingly risky, the returns when they do succeed are so high. But that's not the only reason investors like startups. An ordinary slower-growing business might have just as good a ratio of return to risk if both were lower.

So why are VCs interested only in high-growth companies? The reason is that they get paid by getting their capital back, ideally after the startup IPOs, or failing that when it's acquired.

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Startup = Growth

Startup = Growth

paulgraham.com

18 ideas

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4.75K reads

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tifmiller

Quantity surveyor

An important read for anyone thinking of starting up a company.

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