Open Source Venture Model (OSVM) V1

  1. This is not meant to predict returns. It’s best used by someone actively tweaking the model to understand how different variables interact with each other.
  2. This isn’t the right way to think about returns. Exits in this model are based on averages, but returns in venture are not based on averages.
  3. The model also doesn’t take into account that all else being equal, the more investments you make the more likely you are to invest in a big winner.
  4. It also makes other simplifying assumptions like assuming your fee stays constant over the length of the fund, assuming the maximum number of rounds before an exit is three, etc.

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Building @askumbrella. Previously building products, teams, and companies at @sidewalklabs & @imgur, investing at @a16z http://samgerstenzang.com

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Sam Gerstenzang

Sam Gerstenzang

Building @askumbrella. Previously building products, teams, and companies at @sidewalklabs & @imgur, investing at @a16z http://samgerstenzang.com

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