Do you know" THE POWER LAW OF VENTURE CAPITAL" ....??🤔 What do they see in startup before investing...??💰 Venture capitalists aim to identify, fund, and profit from promising early-stage companies. They raise money from institutions and wealthy people, pool it into a fund, and invest in technology companies that they believe will become more valuable. If they turn out to be right, they take a cut of the returns—usually 20%. Aventure fund makes money when the companies in its portfolio become more valuable and either go public or get bought by larger companies. Venture funds usually have a 10-year lifespan since it takes time for successful companies to grow and “exit.” But most venture-backed companies don’t IPO or get acquired; most fail, usually soon after they start. Due to these early failures, a venture fund typically loses money at first. VCs hope the value of the fund will increase dramatically in a few years’ time, to break-even and beyond, when the successful portfolio companies hit their exponential growth spurts and start to scale. The big question is when this takeoff will happen. For most funds, the answer is never. Most startups fail, and most funds fail with them. Every VC knows that his task is to find the companies that will succeed. However, even seasoned investors understand this phenomenon only superficially. They know companies are different, but they underestimate the degree of difference. The error lies in expecting that venture returns will be normally distributed: that is, bad companies will fail, mediocre ones will stay flat, and good ones will return 2x or even 4x. Assuming this bland pattern, investors assemble a diversified portfolio and hope that winners counterbalance losers. I would love to know some more input on it from great VC's. Share your thoughts in comment ~ Zero to One Follow : Changemakerstribe Full Audiobook is available on : Spotify, Anchor, YouTube #0to1 #Zerotoone #hkishor4you #habits #mindset #motivation #mindfulness #wellness #fitness #success #positiveattitude #positivemindset #wellbeing #coaching #Community #Group #Tribe #people #help #support #connect #grow #discord #whatsapp #con
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