1
Each year about 600, 000 start-ups are launched. Less than 0.5 percent attract VC. Of Inc. magazine's annual list of the 500 fastest growing companies in the United States assessed over a decade (1997—2007), less than 20 percent of companies were venture backed” -“62.4 percent of VC investments were completely lost while 3.1 percent of the investments accounted for 53 percent of the profits for roughly 600 investments.Mahendra Ramsinghani
2
A good portfolio manager knows which companies to keep and which ones to let go. Many a GP has struggled with portfolio companies that cannot meet their value-creation milestones, or raise additional follow-on rounds of capital, or generate target returns in a time span of, say, five to seven years. The faster you recognize those losses, the better it is.”-“ As David Cowan says, “Just focus on your top five–the rest is distraction.” The harder part of the investor's discipline is to know when to quit.”-“ You have to constantly scan all of those things and be willing to adjust your own sense of what's a reasonable outcome and move the company into a position where it has the maximum chance to succeed. ”-“Time is your enemy: Portfolio companies always take twice as much capital and twice as long to exit. Early-stage companies rarely meet milestones as planned and always burn cash faster than anticipated.Mahendra Ramsinghani
3
Amidst all the hype and hoopla around this business, I wanted to emphasize the challenge–it is seductive but the failure rate is very high. And those who fail have no good place to go.Mahendra Ramsinghani