How much money could you potentially earn by investing in startups?
Well, if you’re a longtime reader here, you’ve seen countless studies on the returns you could have made in the private startup market.
But what about real-world numbers? In other words, actual profits that came from startup investments over long periods of time?
Well, that’s precisely what I want to show you today. You see, a well-known startup investor recently “leaked” his firm’s profit numbers from the past decade.
Today, I’ll share those numbers with you…
So you’ll be able to determine for yourself whether they live up to the hype.
Mutual Funds for Startups
Before we dive into the numbers, first let me explain where they came from.
Professional startup investors are called Venture Capitalists. And their firms are called Venture Capital Funds.
These funds are similar to mutual funds — but instead of investing in a portfolio of publicly traded stocks, they invest in a portfolio of startup companies.
One well-known venture fund is called Union Square Ventures (USV). Its offices are just around the corner from Crowdability’s headquarters in New York City.
USV was an early investor in startups including Tumblr (acquired by Yahoo for $1 billion) and Twitter (which now has a $56 billion market cap).
Profits Revealed
But Tumblr and Twitter are examples of its successful investments.
What about its not-so-successful ones? Or the ones where USV lost money?
Until recently, few people knew what the firm’s true overall returns looked like…
But a few days ago, the firm’s founder and Managing Partner, Fred Wilson, published a blog post including data on the firm’s REAL returns from the past decade.
According to Wilson, over the past 10 years, USV has earned an average of 58.6% per year.
That’s amazing. To put it in context, it’s nearly 10x higher than the stock market average of 6% per year, and it’s even higher than Warren Buffett’s average annual return of 20% per year.
And keep in mind: that figure includes USV’s winners and losers.
Not a Surprise!
To many people, these results were shocking…
But Matt and I weren’t surprised at all.
You see, we’ve been tracking and investing in this market for a long time. So we know how profitable it can be to invest in early-stage private startups.
For example, a couple of years ago, we reviewed a study from an investment research firm called Cambridge Associates. Cambridge advises some of the largest investors in the world — institutions like Harvard University and the Bill Gates Foundation.
In this study, Cambridge published the results on the long-term returns generated by early-stage startup investments. Simply put, it found that, over 25 years, a portfolio of startups generated an average return of 55% per year.
And as you can see, this study matches the real-world returns of USV almost perfectly!
Now It’s Your Turn to Get Started!
After reading this essay, you might be champing at the bit to dive into startup investing.
Well, our mission is to make that as easy — and as profitable — for you as possible.
Which is why Matt recently sat down for a 60-minute interview to reveal our proprietary strategy on Pre-IPO Cheat Codes.
As you’ll see here, these simple codes show you how to get access to the world’s next billion-dollar companies — while they’re still tiny (and cheap) startups.
Click here now to watch the full interview »
Best Regards,
Founder
Crowdability.com
