An Educational Webinar Series
We’ve completed the 3-part series of webinars to explore:
- Why Most Venture Funds Underperform (YouTube; approx. 1 hr)
- Why is the Venture Fund Model Largely Unchanged (YouTube; approx 1 hr)
- How to Invest in Venture Capital with Confidence (YouTube; approx 1 ½ hrs)
Extracts from the webinars include:
Conclusion (29 seconds)
- Venture industry is not a profession and lacks proper training on risk and portfolio management practices.
- The ‘Power Law Narrative’ is both correct and incorrect.
- The proper application of the ‘Three D’s’ can deliver compelling returns.
The 3 D’s (1 min)
- Disciplined Capital Deployment — invest over multiple rounds
- Diversification — the best way to manage transaction risk
- Data-driven Decision Making — eliminates biases and inefficiencies to manage portfolios properly
Factors Determining Startup Success (1 min)
- Timing — #1 by a fair stretch
- Team/Execution
- Idea
- Business Model
- Funding
Disciplined Capital Deployment — Dollar Cost Averaging (57 seconds)
- Dollar Cost Averaging is the MOST important decision a vc can make to manage timing risk and deliver compelling time-weighted and dollar-weighted returns for investors.
Diversification — The Only Free Lunch in Investing
- Diversification is critical to manage transaction risk and optimize the statistical probability of capturing a big winner or winners.
Data-Driven Decisions (1 min 38 secs)
- The biased and inefficient nature of the traditional due diligence process can be fixed with the proper data.
What Data to Focus On (56 seconds)
- Algorithms outperform human bias.
- Simple algorithms outperform complex ones.
- Identifying the right 4 data points to for a simple algorithmic decision model is key.
Optimize After-Tax Returns (1 min)
- QSBS Sec 1244 — losses deductible against ordinary income
- QSBS Sec. 1202 — gains can be tax free
The research which supported these presentations can be reviewed HERE.
A white paper summarizing the research — Process Alpha: How to Construct and Manage Optimized Venture Portfolios — provides illustrative examples of what a venture fund would look like if the research were applied and executed.
If you would like to discuss the research further, or see research put to practice in the Legacy Funds platform — a Venture Turnkey Asset Management Platform (V-TAMP) —feel free to reach out to me at joe@angelspan.com.
