Should I take venture capital?

  • Let’s say a VC fund has £100m. Their game is to “3x the fund” within a decade. In other words, at the end of 10 years the VC says “thank you mr LP investor for my bag of £100m, here is a bag of £300m back. Pleasure doing business.”
  • The VC fund had a portfolio of 20 companies
  • On exit the VC fund owns an average of 10% in each company
  • So…in order to turn £100m into £300m the entire portfolio needs to be worth £3bn
  1. You are still super unlikely to be a ‘fund returner’ worth £1bn +

Postscript

1. Related – a good article on the dangers of raising too much too quickly. Again, just know the game you are playing ;)

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Alex Dunsdon

Alex Dunsdon

2.1K Followers

VC Partner@SAATCHiNVEST. Seed investor in Citymapper, Farewill, Ometria + more. Chief of Staff@Redbrain. NED@Picassolabs. Founder Linkybrains.com