Most startups indeed fail and many end up returning only 1x or similar,
which counts same as failing. In a portfolio of risky deals that fail, the
ones that give the money back don’t help. The big wins matter and that
explains startup investing. Seed is about “could it be google” and VC is
about “could it be Instagram” and PE is about “could it be Mint” which I
would describe as 1000x, 100x, 10x type outcomes for certain participants.
I was thinking what I look for in the stock market and I realized recently
that are some very high potential public companies. I mean, obviously,
right? But here are some companies with 2-5x returns in the last 5-8 years:
google, VMware, apple, amazon, yahoo. These are not small caps.
So this is what I am interested in with my stock picking cases: companies
that I understand like startups and that could change 2-5x.
They abound: Netflix, Amazon, Stratasys, Autodesk, Pandora, LinkedIn,
And stocks that could or have fallen massively include: Intel, Microsoft,
Dell, Real, etc etc.
Now I understand better these comments from Andreessen that they have
contemplated a hedge fund.