Sometimes VCs are a bit like hedge fund traders. They have a lot of terrible investments but one great one that made them some money and made more people want to invest. Often though there is little indication the initial one success was much more than just luck and they then proceed to lose a bunch of money for the investors that came in based on their “great track record.”
There are of course those that truly do have a great record over a long period of time but they are much less common. We’re coming off a period where VCs and others could probably have thrown darts at the wall and made a half decent return. Now that’s all changed so we’ll see who gets washed out and who can stand on their results long term.
As I think it was Warren Buffet once said, when the tide goes out is when you get to see who wasn’t wearing any pants.
There are of course those that truly do have a great record over a long period of time but they are much less common. We’re coming off a period where VCs and others could probably have thrown darts at the wall and made a half decent return. Now that’s all changed so we’ll see who gets washed out and who can stand on their results long term.
As I think it was Warren Buffet once said, when the tide goes out is when you get to see who wasn’t wearing any pants.