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Optimizing for Multiples on Money Returned by Avoiding Really Big Funds
To optimize for high returns on investment, it's best to avoid really large funds with billions of dollars. As funds grow, the potential for big profits decreases. This is because turning $1 billion into $5 billion requires creating $4 billion of wealth, which is a difficult task. To achieve this, you must find outlier companies with great potential, but this comes with high execution risk. Although there are other risks like technical and market risks, execution risk is a key factor.