Process Alpha: How to Construct and Manage Optimized Venture Portfolios | Joe Milam, Journal of Portfolio Management August 2022

The author provides a specific strategy to design and manage an optimal venture investment strategy, regardless of the venture thesis. The author first discusses the contributing factors that have contributed to the consistent underperformance of the median venture capital fund performance and highlights the recent research findings and actions taken by Sequoia Capital to frame the direction of the innovation in the venture fund model. He then offers specific examples of how an optimal fund would be structured and managed, presuming there is proper reporting and analytics available on the individual portfolio companies. Last, the author makes a case for professionalizing the venture industry with recognized training, curriculum, and a certification and continuing education requirements to parallel other recognized professions.

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