How long will it take for my investment to generate returns?
Startup investments are typically long-term investments with 5- to 8-year horizons. However, given the multitude of factors that can create a payout event and the stages at which you may invest, this varies widely. There are scenarios that may result in a payout within a year or two, such as an early acquisition as a means to obtain proprietary technology or specific executive talent. Likewise, it could be possible that an IPO is the event that triggers a payout, and if you are one of the initial investors in a company, you could be waiting upwards of a decade to receive your return. The time between Facebook’s founding and IPO was 8 years (2004 – 2012).