I am reminded of David M. Livingston's 1998 paper, "The Business of Commercializing Space." In the paper, David survey's 600 venture capital firms asking them about about their expectations when completing an investment. This quote from David's paper should give you an idea of the kind of IRR these VC's are looking for:
"Ten to one returns as a minimum; Returns ranging from >30% to >100% IRR; Greater than 30% IRR; Time period of 3-6 years needed; Hundreds of times the return of a normal business."What I love from Fred's lesson on IRR - Fred actually imbeds his spreadsheets (complete with formulas). I firmly believe you understand the concept better after you have built the formulas. I am considering doing the same spreadsheet imbedding for some of my upcoming posts. Great idea Fred!