

Ask HN: How many Startups do do you need to invest to get a return - Iakson

I was was wondering in how many Startups does an investor need to invest to get a return since not every Startup is successful. 
Are there any Statistics about this topic?
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rahimnathwani
This is not a well-formed question, mainly due to ambiguity. Perhaps you mean
something like:

"In how many startups do I need to invest in order that my chance of making an
overall annualised return of x% (where x is 0 or 10 or 20) over y years (where
y is 5 or 10) is above z% (e.g. 99)."

The above is a question about diversification, and assumes that the quality of
startups is constant as you add more to the mix. For this to be the case, you
probably need to set some stable criteria to make the investment decision.

If you knew the answer to the question, you would need to maintain these
criteria. You can't rely on diversification to save you, and just 'spray and
pray'. If you aren't selective, your portfolio (and its returns) will be
dominated by duds.

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jacquesm
This is an un-answerable question. If you want a large numbers answer then you
could look at Ycombinator information and divide the number of startups they
invested in by the number of successful startup by _your_ measure of
'successful'.

Alternatively, the number is simply '1'. All it takes is one good start-up
that you invested in. The problem is to identify a winning start-up before it
has reached your goals for success.

