{"id":364,"date":"2009-06-04T11:25:59","date_gmt":"2009-06-04T15:25:59","guid":{"rendered":"http:\/\/hepguru.com\/blog\/?p=364"},"modified":"2009-06-04T11:25:59","modified_gmt":"2009-06-04T15:25:59","slug":"the-evolving-vc-business-model","status":"publish","type":"post","link":"https:\/\/hepguru.com\/blog\/2009\/06\/the-evolving-vc-business-model\/","title":{"rendered":"The Evolving VC Business Model"},"content":{"rendered":"<blockquote><p>To give a fund&#8217;s investors a 20% annual return, the firm needs to triple the money raised within a six-year period, Kopelman said. For a $400 million fund, that means returning $1.2 billion to investors. Since VCs typically don&#8217;t want the risk of holding more than 20% of the companies they invest in, they have to help build a few companies with a total of $6 billion in market value. But in the past few years only a handful of companies have sold or gone public for more than $1 billion. &#8220;You sit there and say, &#8216;Holy crap, that model doesn&#8217;t work,&#8217; &#8221; said Kopelman.<\/p>\n<p>What&#8217;s a venture capitalist to do? For Kopelman and other super angels, the answer is to get small.  Super angels still aim for billion-dollar exits, but their model doesn&#8217;t hinge on home runs. Instead, they can profit by hitting singles and doubles and reducing their strikeouts.<\/p><\/blockquote>\n<p>&#8212; <a href=\"http:\/\/redeye.firstround.com\/\">Josh Kopelman<\/a>, First Round Capital in a <a href=\"http:\/\/www.businessweek.com\/magazine\/content\/09_22\/b4133044585602.htm?chan=magazine+channel_top+stories\">BusinessWeek<\/a> interview.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>To give a fund&#8217;s investors a 20% annual return, the firm needs to triple the money raised within a six-year period, Kopelman said. For a $400 million fund, that means returning $1.2 billion to investors. Since VCs typically don&#8217;t want the risk of holding more than 20% of the companies they invest in, they have [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-364","post","type-post","status-publish","format-standard","hentry","category-quoted"],"_links":{"self":[{"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/posts\/364","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/comments?post=364"}],"version-history":[{"count":1,"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/posts\/364\/revisions"}],"predecessor-version":[{"id":365,"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/posts\/364\/revisions\/365"}],"wp:attachment":[{"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/media?parent=364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/categories?post=364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hepguru.com\/blog\/wp-json\/wp\/v2\/tags?post=364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}