Investing in startups is risky - 7 out of 10 will fail or be loss-making.
But is venture capital a risky asset class?
Claudia Zeisberger argues - No. Most VC funds choose to act in a risky manner by not diversifying, but that does not make the asset class risky.
How to de-risk VC portfolios?
To de-risk venture capital, CIOs simply need to acknowledge that VC math is different from public markets math. The importance of low-probability, excess-return-generating investments means that proper diversification requires a portfolio of at least 500 startups. So yes, volume matters!
The golden rule for investors into the venture asset class must therefore be: Build a portfolio of 500 startups.
The full article on the topic is here:
www.institutionalinvestor.com...
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