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by ProAm 2469 days ago
Did people think a 44% return was sustainable?
3 comments

I would imagine that 44% return went a long way towards the vaunted status A16z had. In that, while perhaps not expecting to stay at such a high level of return, it's news because it wouldn't have been expected that such a drop (to the point where investing in common stock market index funds would have yielded a similar or better return) would have happened.
The point, as mentioned by the article, is to consistently beat out other similar investments at that scale (ie, index funds, private equity, etc). 44% isn't the competition, no. At a minimum 15-16% in the long run.

But otherwise at a more local level high risk capital expects high rewards.

And isn't 16% ans 12% still excellent? It seems better than almost anything else really...
Certainly not excellent - Obviously there is a lot that goes into it - but 20% would be closer to the average expected return on a VC fund like A16z based on the style of investing, not achieving that - or higher - would be a disappointing run.
This isn't an index fund we're talking about.
The S&P 500 has returned an average of 12.5% annually since 2011.