Equity Club

Issue No. 62 - December/January 2011

VC myths

by Conor McKenna

Myth 1: VC is an easy way to get rich quickly.

Reality: VC is a slow road to wealth accumulation:

• 2+ years to raise the fund

• 3-4 years investing the fund

• 5–10 years harvesting the fund

• Significant risk of claw-back from fund investors

• Zero guarantee of a return on investment (bar management fees)

Myth 2: Efficiency is achievable.

Reality: Venture is inherently inefficient. VC couldn’t make high returns if it weren...

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