Craig Coppola, Principal at Lee & Associates, attended the Counselors of Real Estate Annual Convention last year and offers a few takeaways from the event that offer guidance and suggestions for real estate professionals going forward:
–Seek to manage and mitigate risk, not eliminate risk.
–Avoid the tyranny of the averages
–Be local. Do not just fly in and out.
–Hire local if possible – they know the market.
One of Coppola’s favorite takeaways from the event comes from Roy Schneidermann of Bard Consulting talking about venture capital. Here is the breakdown of venture capital money returns:
- 30% of investments–No return at all
- 20%–Capital is returned, but no profit
- 20%–Return is two times invested capital
- 20%–Return is five times invested capital
- 10%–Return is 10-300 times invested capital
- Thus, the biggest risk isn’t that the venture capital industry is “missing the one big one.”