
A Different Approach to VC - wslh
http://avc.com/2015/10/a-different-approach-to-vc/
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msandford
Yeah I don't think you can do non-VC VC because you need to have good odds of
the crazy return. You can do non-VC investing, but you have to take far
smaller risks in order for the far smaller returns to be OK.

If I need to make 10x over 10 years there are a bunch of ways to do that.

1\. lose nothing, make 25% a year, every year

2\. lose nothing, make 10x on a single investment of 100% of the fund

3\. lose nothing, make 90x on a single investment of 10% of the fund

4\. lose everything except a 100x investment of 10% of the fund

5\. lose everything except a 1000x investment of 1% of the fund

6\. lose everything except a 10000x investment of 0.1% of the fund

Most VC exists somewhere between 3 and 6. This "build the cashflow and
business fundamentals" strategy probably exists more in the region of 1-2 and
maybe up into 3 a little bit.

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rokhayakebe
Now if only you have a sure way of getting 25% yearly when the initial
investment is above 6 digits.

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AndrewKemendo
I'm not, nor do I have any interest in being a VC/Angel etc...but it seems to
me that there might be a good strategy in an "Index Fund" approach. Something
like putting in 10-100k with little diligence or reporting requirements across
1000 startups.

Whatever works works, whatever doesn't won't but in theory you would hit the
growth numbers of the "High Tech Startup" network.

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supster
You would run into an adverse selection issue where only low quality startups
would want an index fund investor while high-growth ones would seek
investments from top-tier investors. The index fund approach works best in
public markets.

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ganeumann
Fred's blog is great, but this post is really a link to Bryce's blog post:
[http://bryce.vc/post/130071493425/my-xoxo-
talk](http://bryce.vc/post/130071493425/my-xoxo-talk)

Perhaps just go read Bryce's post, which was Fred's intent.

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_pius
That's not really fair. In this post, Fred announces that he agreed to invest
in Bryce's fund.

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ganeumann
I guess. I figured since all of the comments were about Bryce's post and none
about Fred investing in it, there's be a better conversation if people read
Bryce.

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egusa
it's great to see indie.vc and its new approach to investments in companies; i
think the challenge is that most vc models are based on a power-law (and i'm
not yet sure how that fits with indie.vc's model)

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andreasklinger
given that all vcs play the same game they also align themselves in a power
law distribution (from the market pov)

in other words - they all play the same game - of making the best one look
best

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byron_fast
A different approach would be refusing to invest in anything that is simply an
imitation of a success or a high valuation.

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angersock
So, literally and pathologically investing in things that are not proven to
have a good return?

