Thanks for that. Not enough people know about it.
It is even worse for reasons that you didn't mention. These VC/private equity
firms tend to sell off bits of an existing company to pay off the debt and then
milk what remains until it dies. There is a classic example written up in the
book "Glass House." This describes how Anchor Hocking was taken overt and
driven into bankruptcy. Even worse it destroyed the once charming city of
From: Axil Axil <janap...@gmail.com>
To: vortex-l <firstname.lastname@example.org>
Sent: Thu, Aug 31, 2017 4:08 pm
Subject: Re: [Vo]:Rossi's imaginary company folds
Myth 4: VCs Generate Spectacular Returns
Last year my colleagues at the Kauffman Foundation and I published a widely
read report, “We Have Met the Enemy…and He Is Us,” about the venture capital
industry and its returns. We found that the overall performance of the industry
is poor. VC funds haven’t significantly outperformed the public markets since
the late 1990s, and since 1997 less cash has been returned to VC investors than
they have invested. A tiny group of top-performing firms do generate great
“venture rates of return”: at least twice the capital invested, net of fees. We
don’t know definitively which firms are in that group, because performance data
are not generally available and are not consistently reported. The average
fund, however, breaks even or loses money.
We analyzed the Kauffman Foundation’s experience investing in nearly 100 VC
funds over 20 years. We found that only 20 of our funds outperformed the
markets by the 3% to 5% annually that we expect to compensate us for the fees
and illiquidity we incur by investing in private rather than public equity.
Even worse, 62 of our 100 funds failed to beat the returns available from a
small-cap public index.
Venture capital investments are generally perceived as high-risk and
high-reward. The data in our report reveal that although investors in VC take
on high fees, illiquidity, and risk, they rarely reap the reward of high
returns. Entrepreneurs who are distressed when VCs decline to fund their
ventures need only review the performance data to see that VCs as a group have
no Midas touch for investing.
Like IH, investors may commit to high risk and likely financial loss motivated
by other factors than the profit motive, They may want to fund a project that
will advance the state of the human condition. Such funding is more like a
charitable donation. Such charitable funding is not associated with the concept
On Thu, Aug 31, 2017 at 3:42 PM, Jed Rothwell <jedrothw...@gmail.com> wrote:
Rossi's imaginary company, J.M. Products, has folded its imaginary tent and
vanished in the night:
I have heard that Rossi is planning to go to Sweden to swindle his next group