Chapter
The Power Law Market of Venture Capital
56:23 - 1:03:44 (07:20)
The venture market operates as a power law market where founders owning more of the company ultimately leads to higher percentage ownership when the company is sold or goes public, while investors left out of good deals see their returns diminish. This results in a multi-decade cycle of capital in and capital out.
Clips
The venture market is a power law market where good companies attract more competition from VCs, leading to higher percentage ownership for founders and lower returns for those who missed out on the best deals.
56:23 - 1:01:54 (05:30)
Summary
The venture market is a power law market where good companies attract more competition from VCs, leading to higher percentage ownership for founders and lower returns for those who missed out on the best deals. This is likely to continue in a cycle of capital investment and withdrawal over several decades.
ChapterThe Power Law Market of Venture Capital
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The modern age of venture capital is relatively young, with less than 30 years of history.
1:01:54 - 1:03:44 (01:50)
Summary
The modern age of venture capital is relatively young, with less than 30 years of history. However, in contrast to the early days of entrepreneurship, today's venture capitalists are able to take risks with less severe consequences in the event of failure.