Investing in startups is hard.
This anti-portfolio is so impressive it seems to suggest a strategy of investing a small amount in all but the stupidest rather than even trying to pick winners
"Well", I said, smiling, "you'll probably think our idea is just as preposterous, and saying you didn't take the jump like it's a badge of honor probably means your firm won't work for us".
If you dig into YouTube long and deep enough, you will see it being "too crooked to fail" kind of purchase (most Goog board was against it; one of the owners is a family of a big VC name in Valley, etc).
> [OVP] funds have returned -16.7 percent, -18.6 percent, and -11.9 percent, respectively, according to the most recent data posted online by the Oregon Public Employees Retirement Fund
"Let me know the last time (traditional) venture capital led an innovation. [...] As an industry, venture capital is now being disrupted by new entrants rather than the existing players. Everybody from Dave McClure to Andreessen were outsiders who were entrepreneurs themselves." (http://youtu.be/BUD2gxU5LPM - quote is at 49:30)
VCs are fast followers who are all racing to find hot ideas that have already started to take off, but it seems that most of them are no better at foreseeing and driving real innovation than even any of us.
Anyways, I also found this article: http://www.xconomy.com/seattle/2012/10/11/exclusive-ovp-vent...
Contrast with Bay Area, where many people seem to love the game and aspire to be angel investors themselves one day.
This is just conjecture, there's likely some other reason.
The Internet boom was just beginning. Amazon had sales of $4M a year.
We had a handshake on a term sheet with the CEO to put $2M into Amazon
for 20% of the company (a $10M post money value). At the eleventh hour,
some guy named John Doerr flew up and offered $8M going in for 20% of
the company (a $40M post money value). Handshake? What handshake?
To get even, we buy all our books at Barnes & Noble. We don’t think
Amazon has noticed.
Put in 30,000 dollars for 1 % of a company and option of ten. Startups must be incorporated, and have a one page business plan. Aim to get 50/50 balance of college grads and middle aged contractors. 30,000 is a year of ramen or a quarter or half year for a middle aged contractor. Long enough to get off the ground.
Then you have funded 10,000 startups for a 300 million fund.
Rinse after six months and drop 3/4 of them. Then repeat for the remaining 3000. After that you have a stable of maybe 1000 startups now actually talk to them.
Is this just a dumb idea? I mean picking winners and crazy ideas is so hard why not ignore it ?