Author: OurCrowd

Angel investors dream of finding and investing early in the next Uber, Airbnb, Waze, or Mobileye. While it’s easy to get seduced by the hype, serial startup investors know it is hard to be successful in this asset class. With the help of members of OurCrowd’s experienced investment team and other industry resources, we have put together a quick, three-part guide to ‘earning your wings’. These articles highlight essential terms and strategies while referencing accepted industry best practices; with these basics in hand, getting started in startup investing can be a lot smoother. Part 1: The Basics | Part 2: Risky Business | Part 3: Strategy Part 2: Risky Business Understand the Risk The distribution of returns within a VC portfolio typically follows the power law curve. According to Horsley Bridge, if you take a longtime limited partner in VC funds who has been collecting data on VC returns since 1983, you’ll find that just 6% of their hundreds of investments have generated 60% of their total returns since 1985. Professor William Sahlman of Harvard Business School is quoted saying, “80%...