EIGHTY LOSSES, ONE 236-FOLD RETURN
I posted a venture-capital example that starts with an uncomfortable vote. At a VC conference, 80% of attendees thought AI startups were overvalued. Only 6% thought they were undervalued. David Clark of VenCap pointed out that both groups could be right.
My example put $1 million into each of 100 startups. Eighty went to zero. Fourteen returned the original investment. Five returned ten times the investment. One returned 236 times.
The arithmetic: $14 million from the break-even investments, $50 million from the five tenfold returns, and $236 million from the single biggest winner. That adds up to $300 million on $100 million invested, even with eighty complete losses.
Without that one 236-fold return, the other ninety-nine investments produce $64 million on $99 million invested. The biggest winner accounts for more than three-quarters of the money returned.
This was a hypothetical portfolio, not a report of my returns. The example depends on finding and holding that one investment, alongside the five tenfold winners.