Sethi: Early-stage angel rounds typically see an 80% failure rate
Arjun Sethi · Arjun Sethi – A Technology Company that Deploys Capital at Tribe, Venture is Eating the Investment World 10 (Capital Allocators, EP. 240) · Mar 14, 2022 · at 16:51
Tribe Capital co-founder Arjun Sethi reflects on his early angel portfolio returns and industry loss rates.
0:00 / 0:06exact quote · 6.0s
720p mp4 · rendered on demand · StarZero watermark
“The same loss ratio that you see typically at the early, early stage angel rounds, which is 80% of the stuff you invest in fails.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Arjun Sethi
Sethi: Social Capital marketed data capabilities ahead of actual execution
“I don't think we successfully did that, but I think we did successfully marketed it ahead of what we could do, but we did bring some of the brightest minds around the table.”
Sethi: VCs demand high ownership targets because they are bad pickers
“A lot of the reasons why people focus on ownership, it's a hard thing to say is that they're just bad pickers. So if you say I can focus on 20, I want 10, 15, 20% ownership in this company. It's because they believe that if they make failure somewhere else tha…”
Sethi: Startups like Terra and FTX could reach hundreds of billions
“These companies will probably at some point, if they continue to grow at the pace they're growing, could be worth hundreds of billions of dollars.”
Sethi: Tribe Capital's portfolio loss ratio has always been under 5%
“And so historically, and up until this day, you know, fast forward four or five years since we started, our loss ratios have always been sub five percent.”
Sethi: 90% of startups lack product-market fit, even after raising $100M
“90% of the time, companies do not have product market fit. That's a really hard statement. Even companies that have raised upwards of 25, 50, a hundred million dollars, sometimes they don't have product market fit.”
Sethi: A startup's core product-market fit dynamics never improve over time
“One thing that never changes, and we've seen that across every company, we've been a part of Uber, Facebook, Airbnb, Lyft, et cetera. The list goes on where we built a lot of these growth and data science frameworks is that their product market fit and how the…”