Why Venture Capital?

Today’s biggest returns are going to early investors in private companies, especially high-growth technology companies that are changing nearly every aspect of our lives from how we shop to how we travel to how we learn. Superior investment returns are no longer in public markets but in private venture capital investments.

Why now?

The returns in stocks and bonds do not justify their inherent risks and volatility anymore. This is why institutional investors have increased their allocation to alternative assets and venture capital over 5x in the last 10 years. 

1, 3, 5 and 10 year returns in multiple indexes vs. venture capital. Source: Cambridge Associates.

1, 3, 5 and 10 year returns in multiple indexes vs. venture capital.

Source: Cambridge Associates.

Value is created in private markets today

IPO's used to be the norm in technology, but not any more. Today, value is created in private transactions where early stage investors benefit tremendously from the risks they've taken in Silicon Valley startups. As IPO's are delayed, returns move from public to private investors. For example, for Facebook to match Microsoft's public market returns, the company would have to be valued at over $45 Trillion. While public investors waited for the public markets to deliver results, investors in tech and venture capital enjoyed double digit returns year after year as a result of their bets in companies such as Uber and AirBnb.

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Top institutional investors increase their allocations to venture capital every year.

Top institutional investors increase their allocations to venture capital every year.

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