Venture capitalists are entrepreneurship’s avant-garde. Their commercial antennas are developed through their access to companies very early in their evolution. They make multiple bets and hope enough succeed in order to deliver market-beating returns to their investors. Their skill often lies in judging the founders of the businesses they assess.
They are busy at the moment, having completed more than 4,000 deals in the US alone last year, according to the National Venture Capital Association, and attracting the highest level of investment in more than a decade. As they undertake more deals, and more investment, they also attract criticism — notably for being disproportionately male.
We should listen, therefore, when Silicon Valley technology investors tell us what a decade’s experience reveals. Early-stage investor First Round Capital has published the findings of a review of its first 10 years. It looked at the 300 companies and 600 founders it has invested in, removed one huge outlier (Uber) from the data, and assessed how much their value had changed between its initial investment and at exit, or now.
