Getting a 260% (and this is a lower estimate) return might be great depending on the duration. If 10 years would be around 26% ROI. I wonder if there is any ETF that invests in all startups.
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Calculation below:
To calculate your net return based on the provided percentages and their associated returns, we need to determine the weighted average return for each category. The net return is the sum of all these weighted returns.
Here are the steps:
1. *25% of investments make zero return (100% write-offs)*:
- Return = 0
- Contribution to total = \( 0 \times 25\% = 0 \)
2. *25% of investments produce a return greater than zero but less than 1x (are losses)*:
- Let's assume the average return is 0.5x (midpoint between 0 and 1x).
- Contribution to total = \( 0.5 \times 25\% = 0.125 \)
3. *25% produce a return between 1x-3x*:
- Let's assume the average return is 2x (midpoint between 1x and 3x).
- Contribution to total = \( 2 \times 25\% = 0.5 \)
4. *15% produce a return between 3x-10x*:
- Let's assume the average return is 6.5x (midpoint between 3x and 10x).
- Contribution to total = \( 6.5 \times 15\% = 0.975 \)
5. *10% produce a return of 10x or greater*:
- Let's assume the average return is 10x (the minimum in this category).
- Contribution to total = \( 10 \times 10\% = 1 \)
### Total Net Return:
Summing all the contributions:
\[
0 + 0.125 + 0.5 + 0.975 + 1 = 2.6
\]
So, your *net return* is 2.6x or *260%* of your total investment.
This means, on average, you would get 2.6 times your initial investment overall.