

FundersClub Reports Unrealized Net IRR of 41.2% - dmor
http://mattermark.com/fundersclub-irr/

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patmcc
A whole lot can happen between 'unrealized' and 'realized'

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notahacker
Especially if one of the two startups driving all the growth is probably a
Bitcoin startup.

If I'm reading the graph correct, the other spin that could be put on it is
"majority of FundersClub investments receiving follow-on equity funding get it
at lower valuations than FundersClub seed funding"

Maybe you could plot that against the increase in valuation between YC seed
funding and the next round for YC12...

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minimax
I would like to have seen some mention of risk in the Mattermark or the
Funder's Club post. It's great that so many of their portfolio companies have
gone on to do follow on rounds, but what percentage of companies that do a
follow on round have a liquidity event at or above that level? What percentage
end up at zero? Risk is something we have a pretty good idea about for public
equity indexes (S&P 500, Russel 2K, etc), but not necessarily for VC funded
startups where most of the data is private. It seems like the kind of analysis
that should be right in Mattermark's wheelhouse.

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jpeg_hero
pure comedy. how many investments did they mark down do zero?

amazing, a seed fund with no zeros! these guys are good!!

also, where most seed investors die is in the inability to "protect" their
ownership in follow-on rounds.

sounds like they'll figure that out in the next 5 years.

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robertk
My application for membership just got rejected for not making enough money.

Rich get richer, I guess. If I was in a different mood I would write a blog
post in outrage.

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jonnathanson
Are you an accredited investor? Legally, FundersClub _can 't_ accept you if
you're not. This isn't a "rich get richer" kind of thing; it's a federal
regulation. It's not FundersClub being snooty; it's FundersClub complying with
the SEC.

The JOBS Act intends to break down some of these barriers, though its most
important provisions are still pending.

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pbreit
Sounds like a rich-get-richer thing to me.

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ChuckMcM
Well the accredited investor rules really are there to protect people from
getting scammed. That rule just accepts that a material number of the people
asking for investment are going to be unscrupulous bastards who are just out
to take their "investors" money. This way they take it away from people who
can afford to lose it, rather than people who cannot. There are avenues for
non-accredited investors to invest in the market in which the SEC has put a
lot of constraints on the people trying to you pitch you such that if they are
really crooks you can sue them and try to get your money back. Sometimes even
that fails, as in the Madoff case, but they try.

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lectrick
> Well the accredited investor rules really are there to protect people from
> getting scammed.

This is a line of bullshit. If the law allowed it, you could easily set up a
site like LendingClub.com which distributed the risk over many many things,
mitigating it quite a bit, and allowing "smaller" players to take advantage of
it.

One could do the same thing with real estate... If the law allowed it.

The laws against capital investment by anyone who is not a millionaire IS what
is making the rich richer.

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joshhart
We have this already - it's called the stock market and bond market. If you
want to distribute the risk of investing in real estate, I suggest taking a
look at REITs, real-estate investment trusts. They are companies investing in
real estate required to pay out a certain % of profit in dividends.

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lectrick
True, but what if 10 people wanted to co-own a real physical house? I believe
there are laws against that

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zallarak
It's pretty funny to see this compared to the S&P 500. Liquidity premiums
alone could easily account for the difference in returns. I'd take 20% cash
gains over 40% utterly illiquid gains any day. Much more interesting
statistics would be expected % value realization. Then multiply the 40% gains
by that number. For example, if your gains are 40% multiplied by 20% of the
startups ever making an exit, your actual returns are 8%.

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ZoF
There's a type on this[0] page. just ctrl-f: fo

[0][http://mattermark.com/fundersclub-irr/](http://mattermark.com/fundersclub-
irr/)

