Seven Years : Slide 11

This figure depicts the time scale for each class of investors. The Angel investors, from which most of my experience comes. have a three-year investment cycle. Its liquidity, however, does not come until approximately four to seven years later. Its value in portfolio success is sometimes, but not very often, indicated at the end of three years. Handing of the venture capitalist and the Angel to the larger Venture Capitalist occupies another two years. Finally, the investment is either acquired by another company or enters another public market. Over all, you will notice the time required for a project is between four to seven years. The diurnal cycle of the sun is unfortunately too short a time to bring any class of revolutionary or wealth-creating research and development project to its fruition. Even sustaining engineering projects typically takes eighteen months from inception to complete first production. Depending upon the type of industry and the magnitude of the performance desired, the time cycle for revolutionary and market-creating product is between two and a half to ten years.

Management projects, both in time and dollars, should remain consistent with resource management, not by objective management. This is a fallacy in the research and development business.

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