Venture Capital / Start ups: Why should you give a s*** as Value Investor ?
Disclaimer: It might easily be that If I look back at this post in 10 years and that this marks the peak of the current Venture Capital boom but who knows ?
Let’s start with a quick reflection on how to distinguish Value Investing vs. Venture Capital:
What is Value Investing ?
There are many opinions on what Value Investing actually is. There is “Graham” or “Klarmann” style value investing where one tries to buy existing assets at a discount, or ” Buffett style” where one tries to buy great and “moaty” companies at a discount to future earnings. My personal interpretation is to buy good companies at decent prices (something like a GARP strategy) or misunderstood companies. What all those approaches have in common that one tries to protect the downside by getting a “discount” on some perceived value. With regard to portfolio management, full diversification is rather the exception. In its more extreme version, concentrated value investors concentrate on mostly making sure that they don’t have losers in their portfolio and transact very infrequently.