Source: Joe Milam, "Process Alpha: How to Construct and Manage Optimized Venture Portfolios" in J. of Portfolio Mgmt. Private Markets (2022)
The Context.
As these Field Notes display, I am seemingly obsessed with "risk, uncertainty, and profit" (to appropriate the title of Frank Knight's 1921 seminal text).
True appreciation of these topics seem woefully absent in early-stage venturing.
"The logic--and benefits--of proper risk management have not permeated the conventional narrative on venture fund management....The direction the innovation [in funding] takes would benefit from the lessons learned by [some] professionals managing portfolios in public markets. Managing risk--all risk--matters." (p. 10)
Indeed.
"The essence of investment management is the management of risks, not the management of returns.”
— Benjamin Graham
The Details.
