Backing winners: What VCs can learn from the risk models of online casinos - London Business News | Londonlovesbusiness.com
Briefly

Venture capital and online casinos share the fundamental goal of risk management, where calculated decisions can optimize returns. Successful casino operators employ rigorous statistical modeling, behavior tracking, and algorithms to manage risk and ensure profitability. For venture capitalists, understanding the 'house edge' can guide portfolio strategies, emphasizing the importance of pattern recognition, a safety margin in startups with scalable models, and broad portfolio design. Ultimately, effective investments hinge on the strategy rather than on single bets.
Investors can mirror the house edge of casinos by structuring their portfolios to contain enough winners to compensate for inevitable losses.
Success in venture capital, akin to online gambling, relies on recognizing patterns and utilizing data to predict future outcomes effectively.
Read at London Business News | Londonlovesbusiness.com
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