What returns might an ecosystem innovation fund (EIF) get compared to Historical VC? From my new book, Innovation Casino: Grow Digital Revenue with an Ecosystem Innovation Fund.

Written by Eisaiah Engel on April 15, 2019, last updated on Sep 26, 2020.

My 2020 book, Innovation Casino: Grow Digital Revenue with an Ecosystem Innovation Fund, proposes that a large company can fund startups to build innovative products and services in its digital ecosystem and not lose principal if it makes 2,000 investments.

Overview:

This model extends EIF Model #1 to compare EIF returns to Historical Venture Capital (VC) over multiple investment cycles. This model simulates returns for three asset classes: 1) Historical VC returns which are defined in my book, 2) 100 EIFs pooling 20 investments each for a total of 2,000 investments in the top 5 metro areas for high-growth startups, and 3) 100 EIFs pooling 40 investments each for a total of 4,000 investments in the top 5 metro areas for high-growth startups.

Full documentation for this model can be found in Appendix 2 of my book.

What questions do you have about this model? Use the chat function on the right-hand side of this website to contact me.