Last month saw an online disagreement between two prominent investors, Michael Kim and Dave McClure. You can see the Twitter back-and-forth on the topic here.
Portfolio modeling is a literally a monthly topic at our Earlybird. We find ourselves falling into Michael’s camp, primarily because in our region, we simply don’t think we can clear our comfort level threshold with enough companies to try to follow Dave’s strategy. However, in a bull market such as the one we have been in over the last 8 years, I think both strategies can be viable, if you are investing globally.
In our Digital East portfolio, we currently hold >20% stakes in all but one of our investments. It gives us the peace of mind that these positions will return meaningful multiples of our $150m fund, at successful exits, even if they are modest in size.