A Tale of Two Squirrels: The Not So Simple Math on Venture Portfolio Size
Matt H. Lerner
41322

Definitely useful article. There’s clearly an advantage to the 100+ portfolio size. History has proven statistically that we are “blind squirrels”, not the “super squirrels” we hope we can be. It would be interesting to see the results of the “blind squirrels” funds “without their single best performing company”. A 49% drop by missing that one company in 50 is very enlightening and a bit disheartening. I would expect the result to be equally statistically dismal if you left out the top 2 from the 100 portfolio, top 4 from the 200 and the top 10 from the 500 portfolios?

I also have the same question as Sergie. Is median a good measure when the data has such outliers? I would think if 80% of my investments failed (<1x), the median for my portfolio would be close to zero, whereas the mean would be much higher since I’m averaging in my 100x unicorn, right?

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.