If 99pc of start-ups fail, how do AirTree and Blackbird make money?

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If 99pc of start-ups fail, how do AirTree and Blackbird make money?
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Starting an ambitious technology company is undeniably hard, but fresh data suggests failure rates aren’t as high as parts of the industry say.

Statistics requested byfrom the country’s biggest tech venture investors suggest many more start-up companies are staying afloat than the most heightened founder mythology suggests.

But unlike small-business investors who want to preserve capital and grow slowly, venture capitalists bet on a host of companies hoping a small percentage will become enormously valuable in the knowledge many will fail. Mr Alexander’s portfolio has four failures, defined as firms shut down or sold that returned less than invested capital, out of 18 bets. But he said that if one of those surviving companies became a super valuable firm akin to Google, “No one’s going to mind if we lose money on five, 25 or 30 per cent of the investments or even more.

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