The Importance of a Large Venture Portfolio
What Sea Turtles Can Teach Us About Venture Capital Diversification
Baby sea turtles are born into a dangerous world. Each clutch of about a hundred eggs will endure a never-ending gauntlet of hungry birds, deadly waves, and deep-sea predators. Only 2% of these young reptiles will ever make it to adulthood.
Like the sea turtle, startups face many obstacles to survive. The US Department of Labor estimates the survival rate for small businesses to be 80% after one year and roughly 50% after five years.
While the odds against sea turtles might seem insurmountable, the number of eggs they lay has decreased their risk of extinction and contributed to their proliferation over millions of years. This same principle can be applied to your strategy of venture capital diversification.
Diversification is the Hallmark of Good Investing
Venture capital is a high-risk asset class, but a prudent investment strategy focused on a large number of investments can minimize your risk and increase your chance of returns.
How to Survive and Thrive in Venture Investing
Check out a recent white paper from Castor Ventures Partner Cainon Coates, titled How Many Eggs in a Venture Capitalist’s Dozen?, for an in-depth examination of how making many bets and spreading them widely is the best way to survive and thrive in venture investing.
ABOUT THE AUTHORCainon Coates, Partner at Castor Ventures
Cainon has 10+ years’ experience in finance, venture capital, and entrepreneurship, having worked at Boston Consulting Group and PBM Capital Group as well as serving on the founding team of five startups. At BCG, he worked in their private equity practice to conduct due diligence across the semiconductor, transportation, and medical device industries. At PBM (a $500M healthcare-focused venture capital firm), he led investments and worked as an operating partner within portfolio companies (including Human Design Medical, Revive Pharmaceuticals, and Triangle Research Labs). Cainon is a co-founder and advisor of Viafy and was previously a co-founder and CEO of University Laundry (acquired by a national operator and now part of Proctor & Gamble’s marquee Tide brand). He has an MBA from MIT Sloan and a BS from the University of Virginia in Systems Engineering.
Our Total Access Fund (TAF) is our most diversified fund and is available to accredited investors seeking to add venture to their investment portfolio. The fund is diversified by stage, sector, geography, and lead investor and is available in quarterly or annual vintages. (~20% of capital is held for follow-on investments.)
- Single Quarter Vintage: ~50-75 investments deployed over 3 months, $50K minimum.
- Annual Vintage: ~200-300 investments deployed over 12 months, $200K minimum.
To learn more, click below to review fund materials or book a call with a Senior Partner.
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