
How To Calculate A Return On Investment - peter123
http://www.avc.com/a_vc/2010/01/how-to-calculate-a-return-on-investment.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+AVc+%28A+VC%29&utm_content=Google+Reader
======
sachinag
It's a little head-in-the-sand to suggest that restauranteurs and club owners
and whoever else are going to be doing these sorts of things "a few times".
These people are chefs and bartenders. They aren't Danny Meyer or something.
They get one - maybe two - bites at the apple before they're done.

------
Sukotto
Who can forecast more than 1 year out with any degree of certainty?

~~~
cwan
That's why it's useful to consider best case, worst case, best guess
scenarios. It's also why different investors can come up with a wide range of
valuations when they get down to considering an investment. In my personal
experience, few financiers place significant reliance on projected financials
- it's the underlying assumptions / notes that matter.

Just because it's difficult to forecast a year out also doesn't mean that it
shouldn't or can't be done especially since investors themselves have to
assume that they won't be able to exit within a year. Coming up with better
projections for ROI just adds more datapoints from the very
people/entrepreneurs who should know their space/market best (especially in
more stable industries - I note that Wilson emphasizes that this is how he
thinks of non-tech businesses).

