In Silicon Valley's investment philosophy, accepting that 99 out of 100 startups will fail is essential, because the single successful company can generate returns that more than compensate for all the failures, as demonstrated by Ron Conway's strategy of investing in 250 companies where most failed but Google alone generated 3-4 times returns for all investors.
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Silicon Valley Turns Vision Into Reality - Sabeer BhatiaAdded:
Not every business has to be successful.
That is the mantra in Silicon Valley. 99 out of 100 fail, but the one that makes it more than makes up for the failures.
I'll give you an example. When I put money in 250 companies, and every single one of them was failing. Ron Conway, the one who started this, would write letters and say, "It's really hard. I'm not sure if I'll be able to return even 5% of your money." And then, magically, one of his investments was Google. And he made three, four X for all investors.
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