Chapter
The Difference in Returns Between Buyout and Venture Capital Firms
34:24 - 43:51 (09:27)
In the buyout world, it has become increasingly unlikely to get a 40-50% rate of return due to the need to attract more capital, while the best venture capitalists today are probably getting a 30% carried interest return.
Clips
This podcast episode explains the boom of leveraged buyouts in the mid-1980s, as well as how KKR was able to acquire a company with only 5% equity and 95% debt.
34:24 - 37:14 (02:50)
Summary
This podcast episode explains the boom of leveraged buyouts in the mid-1980s, as well as how KKR was able to acquire a company with only 5% equity and 95% debt.
ChapterThe Difference in Returns Between Buyout and Venture Capital Firms
Episode#495: David Rubenstein, Co-Founder of The Carlyle Group, on Lessons Learned, Jeff Bezos, Raising Billions of Dollars, Advising Presidents, and Sprinting to the End
PodcastThe Tim Ferriss Show
In the late 1980s, many people were doing deals with 5% equity, which proved to be problematic during the recession.
37:15 - 40:19 (03:03)
Summary
In the late 1980s, many people were doing deals with 5% equity, which proved to be problematic during the recession. However, today's buyout firms have evolved to put in more capital and have people with real management expertise.
ChapterThe Difference in Returns Between Buyout and Venture Capital Firms
Episode#495: David Rubenstein, Co-Founder of The Carlyle Group, on Lessons Learned, Jeff Bezos, Raising Billions of Dollars, Advising Presidents, and Sprinting to the End
PodcastThe Tim Ferriss Show
The days of high buyout returns are few as it's unlikely to get a 40-50% rate of return, while venture capitalists can get up to 30% returns.
40:19 - 43:51 (03:32)
Summary
The days of high buyout returns are few as it's unlikely to get a 40-50% rate of return, while venture capitalists can get up to 30% returns. The best venture capitalists today are likely to get 30% carried interest, unlike the old days when it was thought to be 20-25% net internal rate returns.