Publications
Publications
- December 2010
- HBS Case Collection
Risk and Reward in Venture Capital
Abstract
This note describes the payoff structure of investment in individual venture capital–backed companies and in venture capital portfolios. Venture Capital investments are characterized by high failure rate (0ver 50%) and a small number of given successes (greater than 10% returns). As an asset, class, venture capital has produced high cyclical returns that mirror trends in capital markets and in markets for new technology. There is a large disparity in median and upper quantize performance. A small number of funds do well on a constant basis. Overall returns on venture capital have been low for the decade ending in 2009. ?????
Keywords
Capital Markets; Venture Capital; Investment Return; Investment Portfolio; Analytics and Data Science; Failure; Performance; Information Technology
Citation
Sahlman, William A. "Risk and Reward in Venture Capital." Harvard Business School Background Note 811-036, December 2010.