The J-curve simplified

Navigating the ups and downs of early investment years

Author

Michael Morgenstern
February 06, 2024

Happy Tuesday Brex community,

Comprehending the "J-curve" in venture capital is pivotal for founders. This financial phenomenon, akin to a powerlaw, represents the typical return pattern. In the early stages, when a venture capital fund is initiated, it often records negative returns due to upfront capital and acquisition expenses. However, as time progresses, portfolio companies gain value, reversing the trend and ultimately generating positive returns, forming an upward curve resembling a "J." For founders, grasping this concept is vital as it provides a realistic outlook. Patience and a long-term vision are essential when navigating the world of venture capital, where initial years may not yield immediate positive returns. Understand venture economics before going out to market! Our team is happy to offer assistance with benchmarking term sheets, guide you through due diligence preparation, and conduct practice investment committee sessions.

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Growing together, Michael Morgenstern

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Dori Yona, Co-founder & CEO Simple Closure

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SimpleClosure automates almost all of the legal, fiduciary, financial and tax-related tasks involved in dissolving a business, granting founders the peace of mind to focus on the future without fear of accruing fines and penalties.

Since coming out of stealth in the summer of 2023, SimpleClosure has helped many founders shutdown successfully, from initial board resolutions to the final dispersion of funds to investors.

Ambassador’s perspective: SimpleClosure addresses a critical pain point for founders but also reduces the risk of accruing fines and penalties associated with non-compliance. Every year >700k businesses shut down. Business failure is part of a vibrant ecosystem and SimpleClosure is solving a perpetual market painpoint. If they get the pricing right, this should be a large business.

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Plus Eight Equity Partners works closely with Company Founders to navigate through the complexities of the entertainment industry to enhance their business opportunities through strategic guidance, networking and personal mentorship. Since inception in 2014, Plus Eight has met with over 2,500 companies in the ecosystem seeking to raise capital. Today, Plus Eight’s investment portfolio consists of 13 companies across North America and Europe. Plus Eight Equity Partners is headquartered in Miami, USA with offices in Ibiza, Spain.

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