To be fair, higher IRR is easier to achieve at small scale though.
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Replying to @jhong @sarah_cone
For sure. And alpha is more pronounced too. Mediocre early stage investors get crushed whereas the beta would carry them more at later stages.
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Replying to @zachcoelius @sarah_cone
Finding alpha as an early angel is like pokemon. Gotta catch them all, or you're basically playing the lottery
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Replying to @jhong @sarah_cone
Not sure I agree with that. At least that is not what I have seen in my portfolio. But this game is so opaque it is hard to know.
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Replying to @zachcoelius @sarah_cone
Are your returns not concentrated from just a few wins?
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I’m starting to collect 3 to 6 unicorns per core fund (18 to 24 mo period) with about 45 to 60 shots each (now on fund 5) As the years go by I think due to brand effects I’m hoping we have larger magnitude wins on fewer shots.
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Right 3 to 6 out of 45 to 60 is a great hit rate. My point was just that people getting into it should not just invest in only 2 or 3 companies. If you are going to do it and want portfolio theory, you need at least 20 probably. Otherwise risk of losing money much higher
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Oh agree 100% 20 is the min I would tell anyone to do as an angel. Take the $ amount someone would be OK with lighting on fire and divide by 20 and that’s the amount to invest in startups each
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What’s the typical angel investment these days? Don’t think I will ever angel invest but it’s interesting to see how much money is needed at a minimum to get started with a chance of success.
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Replying to @Molson_Hart @jhong and
I got my start literally doing $5K but $25K is fairly standard now
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wow! my smallest so far is $10k. you know, just to help put friends starting out companies
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