

Venture Fund Economics - wave
http://avc.blogs.com/a_vc/2008/08/venture-fund-ec.html

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smanek
This just seemed like a rehash of the power of compound interest.

Just remember the rule of 72 (for when you need to estimate these sort of
figures in your head), and read a chapter from a finance book on the time
value of money so you can do the actual math when you have to, and you're set.

For example, if someone tells you they'll double your money in 10 years, you
can compute the annual interest rate needed to see that kind of return.
Assuming that your interest is compounded annually, just say that (1+x)^10 = 2
and solve for x. Or, to get an estimate, you know 72/7.2 = 10 so the interest
rate needed is ~7.2%

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paul
No, his point is that it's more complex than that because the money flows in
and out of the fund slowly.

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jedc
An interesting look "behind the scenes" when it comes to VC money concerns. I
love that there are some people out there willing to share their thinking.

