Measuring Startup Investing Returns Part III: An Apples to Apples Solution?

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, a Milwaukee Journal Sentinel blog covering start-ups and other Wisconsin technology news. Paul’s most recently contributed piece, “Measuring Startup Investing Returns Part III: An Apples to Apples Solution?,” can be found under their Business Tab in the Business Blog section: Click here to view his latest blog.

A short excerpt can be found below:

“In the first blog in this series, I argued that internal rate of return (“IRR”) is too sensitive to market timing distortions to be a good metric for the investment acumen of seed/early stage angel and venture capital investors. In Part II, I suggested that a metric that compared cash-on-cash (“CoC”) returns was better, but still subject to significant distortions associated with the timing, intensity and duration of market cycles. Today, I’ll explore another way to approach the problem; an approach that addresses the timing problem as encountered in both the IRR and the CoC metrics.”

Click here to read more.

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