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| | Venture capitalists typically demand input in the new companies as well as having control. | | Venture capitalists typically demand input in the new companies as well as having control. |
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| | + | == Venture capital rate of return == |
| | + | |
| | + | Venture capital rates of return are frequently expected to be between 20% and 30% on average, measured by Internal Rate of Return (IRR). Top-performing funds potentially achieving returns as high as 50% or more, reflecting the high-risk, high-reward nature of such investments. The specific return can vary significantly depending on the stage of the investment and the performance of individual portfolio companies.<ref> |
| | + | *[https://hbr.org/1998/11/how-venture-capital-works How Venture Capital Works], Harvard Business Review |
| | + | *[https://seraf-investor.com/compass/article/dividing-pie-how-venture-fund-economics-work-part-ii#:~:text=Based%20on%20detailed%20research%20from,to%20expectations%20and%20various%20benchmarks. Dividing the Pie: How Venture Fund Economics Work], Seraf |
| | + | *[https://kruzeconsulting.com/blog/what-vcs-return-expectations/#:~:text=Today%2C%20we'll%20explore%20the,%25%20to%2035%25%20targeted%20IRRs. What are Your VC’s Return Expectations Depending on the Stage of Investment?], Kruze Consulting |
| | + | *[https://www.adamsstreetpartners.com/insights/long-term-trends-boost-venture-capital-outlook/#:~:text=Still%2C%20venture%20accounts%20for%20less,of%20total%20capital%20market%20assets.&text=Investing%20in%20innovation%20has%20generated,13.2%25%20over%20the%20same%20period.&text=An%20analysis%20by%20Adams%20Street,capital%20in%20a%20single%20company.&text=Having%20a%20stake%20in%20the,close%20deals%20that%20look%20attractive. Powerful Long-Term Trends Boost Venture Capital Outlook], Adama Street Investor |
| | + | *[https://www.upcounsel.com/venture-capital-interest-rates#:~:text=the%20overall%20economy.-,How%20Do%20Venture%20Capitalists%20Generally%20Work?,to%20as%20%22vulture%20capitalists.%22 Venture Capital Interest Rates: Everything You Need to Know] |
| | + | *[https://www.linkedin.com/pulse/ultimate-guide-key-performance-indicators-kpis-private-sajal-roy-dx3of#:~:text=Did%20you%20know%20that%20the%20average%20IRR,an%20attractive%20option%20for%20high%2Drisk%2C%20high%2Dreward%20investments. The Ultimate Guide to Key Performance Indicators (KPIs) in Private Equity and Venture Capital (with Interesting Facts)] |
| | + | *[https://altos.vc/blog/paradox-of-the-power-law-in-venture-capital/ Paradox of the Power Law in Venture Capital] (Pareto principle), Altos Ventures</ref> |
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| | + | Articles: |
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| | + | *[https://hbr.org/1998/11/how-venture-capital-works How Venture Capital Works], Harvard Business Review |
| | + | |
| | + | *[https://seraf-investor.com/compass/article/dividing-pie-how-venture-fund-economics-work-part-ii#:~:text=Based%20on%20detailed%20research%20from,to%20expectations%20and%20various%20benchmarks. Dividing the Pie: How Venture Fund Economics Work], Seraf |
| | + | |
| | + | *[https://kruzeconsulting.com/blog/what-vcs-return-expectations/#:~:text=Today%2C%20we'll%20explore%20the,%25%20to%2035%25%20targeted%20IRRs. What are Your VC’s Return Expectations Depending on the Stage of Investment?], Kruze Consulting |
| | + | |
| | + | *[https://www.adamsstreetpartners.com/insights/long-term-trends-boost-venture-capital-outlook/#:~:text=Still%2C%20venture%20accounts%20for%20less,of%20total%20capital%20market%20assets.&text=Investing%20in%20innovation%20has%20generated,13.2%25%20over%20the%20same%20period.&text=An%20analysis%20by%20Adams%20Street,capital%20in%20a%20single%20company.&text=Having%20a%20stake%20in%20the,close%20deals%20that%20look%20attractive. Powerful Long-Term Trends Boost Venture Capital Outlook], Adama Street Investor |
| | + | |
| | + | *[https://www.upcounsel.com/venture-capital-interest-rates#:~:text=the%20overall%20economy.-,How%20Do%20Venture%20Capitalists%20Generally%20Work?,to%20as%20%22vulture%20capitalists.%22 Venture Capital Interest Rates: Everything You Need to Know] |
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| | + | *[https://www.linkedin.com/pulse/ultimate-guide-key-performance-indicators-kpis-private-sajal-roy-dx3of#:~:text=Did%20you%20know%20that%20the%20average%20IRR,an%20attractive%20option%20for%20high%2Drisk%2C%20high%2Dreward%20investments. The Ultimate Guide to Key Performance Indicators (KPIs) in Private Equity and Venture Capital (with Interesting Facts)] |
| | + | |
| | + | *[https://altos.vc/blog/paradox-of-the-power-law-in-venture-capital/ Paradox of the Power Law in Venture Capital] (Pareto principle), Altos Ventures |
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| | == Venture capital skill set and career path == | | == Venture capital skill set and career path == |