Citation:
Nanda, Ramana, William A. Sahlman, Robert White, and Hunter Ashmore. "Business Models Problem Set." Harvard Business School Exercise 816-016, August 2015. (Revised July 2020.) View Details|
Background Note HBS Case Collection December 2010 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; Data and Data Sets; Failure; Performance; Technology;
Citation:
Sahlman, William A. "Risk and Reward in Venture Capital." Harvard Business School Background Note 811-036, December 2010.
