VC & MedTech Upside vs Downside Calculator
Model asymmetric outcomes, dilution-aware expectations, and Monte Carlo portfolio analysis.
Portfolio Parameters
Portfolio Performance
Expected Multiple
Portfolio IRR
Break-Even Hit Rate
Required Win Multiple
Quick Interpretation
Understanding Venture Capital Returns
Venture capital is fundamentally different from traditional investing. Success depends on a few massive winners compensating for many failures \xe2\x80\x94 the "Power Law" of VC returns.
What is a "Win Multiple"?
- 2x: $100K becomes $200K (doubled)
- 10x: $100K becomes $1M (great return)
- 100x: $100K becomes $10M (home run)
Key Metrics Explained
Expected Multiple: Average return per dollar invested
Portfolio IRR: Annualized return percentage
Break-Even Hit Rate: Minimum success rate to not lose money
MedTech Investment Stages & Success Rates
| Stage | Failure Rate | Win Multiple | Time to Exit |
|---|---|---|---|
| Pre-Clinical | 85-95% | 20-100x | 8-12 yr |
| Clinical (I/II) | 75-85% | 10-50x | 6-10 yr |
| Late Clinical (III) | 60-75% | 5-25x | 4-8 yr |
| Commercial | 40-60% | 3-15x | 3-6 yr |
| Digital Health | 65-80% | 5-30x | 5-8 yr |
MedTech Reality Check
Medical technology investments often take 2-3x longer and require 2-3x more capital than initially projected.
The Power Law of VC Returns
Typical VC Fund Breakdown
- 1 company: Returns 10-100x (fund maker)
- 2-3: Return 3-10x (solid wins)
- 3-5: Return 1-3x (modest)
- 10+: Total loss
What This Means
- Portfolio size matters for diversification
- Follow-on capital is crucial for winners
- Time horizon must be 7-10+ years
Key Insight
The goal isn't to minimize failures \xe2\x80\x94 it's to maximize your exposure to potential massive winners while maintaining enough diversification to capture them.
Stage-Specific Benchmarks
| Stage | Check Size | Multiple | Target IRR | Failure |
|---|---|---|---|---|
| Pre-Seed | $100K-$500K | 25-100x | 40-60% | 90-95% |
| Seed | $500K-$2M | 15-50x | 30-45% | 85-90% |
| Series A | $3M-$15M | 10-30x | 25-35% | 75-85% |
| Series B | $10M-$30M | 5-20x | 20-30% | 65-75% |
| Growth | $25M-$100M+ | 3-10x | 15-25% | 50-65% |
The Harsh Reality
Most individual investors cannot achieve top-tier VC returns due to deal access limitations, insufficient check sizes, limited due diligence resources, and inability to provide follow-on capital.
Recommendation: Be conservative with assumptions and realistic about your competitive position.