Herd behavior has long been a staple in financial markets. Boom-and-bust cycles are widely observed, creating opportunities for technical strategies, such as momentum investing. Simply chasing returns exacts a heavy cost from investors, however, and venture capital is no exception.
Tales of fantastic returns — now sensationalized by pop culture — support the growing popularity of venture capital. While The Social Network and Shark Tank make a positive impact by encouraging entrepreneurship and innovation, they are less effective at setting realistic investor expectations.
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