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Understanding the Mind of an Investor #shorts

Name: Understanding the Mind of an Investor #shorts
Uploaded: 2024-01-25T14:00:20+00:00
Duration: 29 s
Channel: Royston G King
Description: In this short monologue, the speaker explains a core principle of venture investing known as portfolio mathematics. He warns founders who become…

25 Jan 2024 · 0 min

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In this short monologue, the speaker explains a core principle of venture investing known as portfolio mathematics. He warns founders who become investors that when building a portfolio of 30‑50 companies, only a handful—typically two or three—will generate the majority of the portfolio’s value. The message emphasizes the need to accept that most investments will be modest or fail, and that the overall success hinges on a few outsized winners.

It's actually because of the nature of portfolio mathematics. When you're an investor, and I'm thinking that many of you are going to join my side of the table after you have your success with your own respective companies. And when you join this side of the table, I believe you're going to just realize that, okay, early on when you're making a bunch of— constructing a portfolio of a bunch of companies, we have to just assume 2, 3 companies in your given portfolio of like 30 or 50 companies that are actually going to bring up the entire value of everything.