The Top 5%

In a casual conversation a remark was made by a venture capitalist who was trying to defend his searching for 20X return on an investment, an outrageous return by most standards. He said that with a 95% failure rate of the businesses he saw to invest in, of course he needed 20X return on the remaining 5% to break even. The highest profile angel investor in the city has said he invested in 17 start-ups and never had one success, not one exit with a profit.

This is difficult and dangerous stuff--unless, of course, you are investing with someone else's money. It seems, unlike the superficial impression, these people are taking risk not to counteract the uncertainty of the investing world; they are counting on it.