Just to share some industry perspective here, I heard that fewer than 15% of venture backed startups are still operating after 3 years (source: http://twitter.com/dharmesh/status/14067731416 <-- HBR hearsay). Presumably a significant majority of the survivors will never see a founder-meaningful exit and are in the "walking dead" category (as VCs call it).
Even if 1 in 3 see a meaningful exit, that puts us at a 5% win rate (I'm guessing it's more like 1 in 5).
I don't know if you'd disagree, but I'd say that venture-backed startups have a better shot at meaningful liquidity than their bootstrapped kin (given how many people have a vested interest in it and given that VC is a quality filter to SOME degree).
Anyhoo, all that tells me that 1% is a heckuva lot more correct than 10-40% (running the numbers).
I'm with the parent of your comment-- whenever you have the chance to nudge that 1% northward, you should take it.
The difference here is my when approached well language. When good angel investors report their #s, e.g. Brad Feld, Fred Wilson, etc. they say roughly 1/3 return nothing, 1/3 return something and 1/3 are successful to some degree. That's the 10-40% I'm talking about.
If you take the universe of all entrepreneurs, then yeah, it's super small, and looks like a black swan event from the outside. But that's sort of the point of the black swan theory--in the right context the black swan isn't nearly as rare. The context I'm talking about is entrepreneurs who are approaching it well. I know that is nebulous and I'm not defining it well, but roughly the type of people those really early stage angel investors would invest in.
Even if 1 in 3 see a meaningful exit, that puts us at a 5% win rate (I'm guessing it's more like 1 in 5).
I don't know if you'd disagree, but I'd say that venture-backed startups have a better shot at meaningful liquidity than their bootstrapped kin (given how many people have a vested interest in it and given that VC is a quality filter to SOME degree).
Anyhoo, all that tells me that 1% is a heckuva lot more correct than 10-40% (running the numbers).
I'm with the parent of your comment-- whenever you have the chance to nudge that 1% northward, you should take it.