I had left my business development position with a global multinational in the mobility sector after leading the growth of $0.5bn in mobility solutions across three continents – Africa, Australia & Asia. I had pivoted from business development to venture building. I had also joined the investment committee @ AngelSchool, a syndicate with +1000LPs to sharpen my skills as an investor.
At the same time, my brother Lynton Peters had also completed the sale of Onecart. The ‘Instacart’ of South Africa to Walmart after growing the business from 3 to more than 1000 employees.
Through our shared experience, we learned three things: 1) Venture Capital (VC) was a risky yet profitable game, and 2) to play at this table – you needed a sizeable cheque book. So the questions became: How great exactly are the returns? How great is the risk associated with these investments? and Can we control the risks?
Consider this:
– According to a NBER paper; following an analysis of 17k financing rounds over a 10yr period, 8000 companies and US 114bn of investment; the average ROI was +-57% with 15% of companies evaluated achieving returns of +1000% and 15% providing negative returns.
– In another study by Mckinsey, Private Equity (PE) outperformed the S&P500 a reasonable public equity market benchmark on a 5, 10 and 20year basis
– Sequoia CeO, Roleof Botha considers a good performing fund, one that returns 5x to its investors
Personally we have seen angels 5x their returns through Onecart. So the returns can be incredible and given private equity on average outperforms public equity, does this mean that PE is also less risky than public equity?
Well the simple answer is ‘it all depends’.
If private equity is investing into startups, then it really depends on the companies in which you choose to invest, which is where VC’s such as Sequoia come into play. They play the critical role of sourcing and performing the due diligence required to find the winners that can provide the “+5x” returns (considering that 90% of startups fail).
Awesome so investing in startups through VC’s (who source winners) can provide incredible returns for investors! The next question we asked ourselves was: How can you invest in venture capital companies like Sequoia?
Simply put, either you need +-$250k or like with the more exclusive funds – it is via invite only. So the unfortunate truth is that private equity assets are traditionally reserved for high net worth or connected individuals. After all, you need money to make money.
Or do you?
Well this what we would like to change and is the reason of Everyone Ventures. A democratized venture company, where Everyone can be part of our venture team and Everyone can participate in venture deals. We invite entrepreneurs, community leaders, experts, investors, coaches, mentors, corporate investors and venture builders to msg us on LinkedIn or contact us here.
