Why VCs look for 10X returns

Why VCs look for 10X returns - Why VCs look for 10X returns...

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Why VCs look for 10X returns - What you need to know when pitching a VC firm Dan Dodge @ http://dondodge.typepad.com/the_next_big_thing/2008/08/why- vcs-look-for-10x-returns---what-you-need-to-know-when-pitching-a-vc-firm.html VCs want to invest at least $5M in startups that have potential 10X returns. That is because it takes as much time to manage a $1M investment as it does to manage $5M. Secondly, every startup looks like a winner when they write the check, but Fred Wilson suggests that 33% will fail, 33% will break even, and 33% will be big winners. VCs start out hoping for a 10X return on every deal but average about 3X to 4X after all is said and done. VC Firm Partners - If a VC firm raises a $250M fund they will probably have 5 partners in the firm, with each partner managing about $50M. If they invest about $5M in each company over several rounds, then each partner will sit on 10 company boards. That is about all a single partner can handle and still do a good job for the portfolio companies. VC Firm Investors
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This note was uploaded on 02/26/2010 for the course ITM ENT526 taught by Professor Wise during the Spring '10 term at Ryerson.

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Why VCs look for 10X returns - Why VCs look for 10X returns...

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