Because the returns onVenture Capital Funds
comes from big checks only
This is purely American experience, but the valid one.
Without returns for Investors, there would be
no tech startup funding.
Money follows the returns.
A little bit of math behindVC firm
• 50% of the investments are dead
• 10% is responsible for the most of the returns
(1 out of 10)
• It is best description of “power law distribution”
So SiliconValley model is about searching for
What the Black Swan company is?
• It is the company which exited returns total
capitalization of the given fund.
• Let’s assume that you have a 50 milion PLN fund.
• Your average share in portfolio company is 20%
• Conclusion is simple: you have to exit at total
valuation (100% shares) of 250 million PLN.
How many public listed companies (on GPW)
have valuation bigger than 250 m.?
How many of them come from tech industry…
Maybe our approach should be different?
There are logical alternatives.
Either we lower risk acceptance with a strategic
approach of lowering the “loss ratio” (remember
Which is makingVC a kind of early stage PE company.
That means reasonable returns but in a longer
“One of the most important thing to
understand about startup investing is that
the best ideas look initially like a bad ideas”
Scaling tech companies in this part of the World
is crucial for future of the whole tech scene.
Once again: returns attracts money,
1. Black Swans are rarely local since the idea of the
world wide web isn’t.
2. IMO we have to focus on niche business (mostly
B2B) trying to win them at least regionally.
3. Engaging global partners (funds, angels, advisors).
Going global is no longer is something
“nice2have”. It’s crucial if want to survive.
Copycat times are over.
If you are one of Samwer brothers skip this slide…
Bartłomiej Gola www.speedupgroup.com