undefined | Better HN

0 pointsbko5y ago0 comments

Finance was very immature industry at that time. There wasn't a lot of money in private investment funds and the investment vehicles to capitalize on this research didn't yet exist. Today's private market would likely seize on an opportunity like the internet. There is appetite for long term focus in today's investors. Just look at PE (price-earnings) ratios of today's stocks, and the frothy revenue multiples in valuations over the last ten years.

0 comments

cj5y ago

Most VC funds have an expected lifespan of (roughly) 10 years. Some longer, some shorter.

If your VC makes an investment 2 years into the fund, the expected return must come within 8 years if it's a 10 year fund.

I guess it comes down to what we consider "long term". If "long term" means 5-10 years, then the VC model works.

But if "long term" means 10-25 years or longer, the VC model becomes an unrealistic financing option.

j / k navigate · click thread line to collapse

0 pointsbko5y ago0 comments

0 comments

cj5y ago

Most VC funds have an expected lifespan of (roughly) 10 years. Some longer, some shorter.

If your VC makes an investment 2 years into the fund, the expected return must come within 8 years if it's a 10 year fund.

I guess it comes down to what we consider "long term". If "long term" means 5-10 years, then the VC model works.

But if "long term" means 10-25 years or longer, the VC model becomes an unrealistic financing option.

j / k navigate · click thread line to collapse