I wish I could add something insightful to this post from Fred but when combined with the extensive comments (must read) I don’t think many people could contribute an insight not already covered. In fact, this entire post plus the comment thread is so deep that it could be the basis for a 2nd year MBA class.
We got to talking about the venture capital asset class and it wasn’t long before we got to the “math problem”. The venture capital math problem is pretty basic, maybe something you’d do in high school calculus or even pre-calculus. Here’s how it works.