"... Actually, he's already diversified. Larsen is an investor in EB Exchange Funds, a San Francisco firm that emblematizes the "let's not do that again" philosophy. EB Exchange enables select entrepreneurs to pool their pre-IPO stock, then share in the proceeds from all of the companies' public offerings, mergers, and acquisitions -- while also spreading the risk of possible failure. It was started in 1999 by Larry Albukerk, who founded a venture capital–backed company twice in his own career; based on that experience, he knows all too well the potential folly of having "all your eggs in one basket." Bent on remedying that, he set up his first fund with 11 participating companies and dubbed it Eleven Baskets LP.

Albukerk says that not everybody gets the concept behind EB Exchange. Entre­pre­neurs in their 20s still tend to feel invincible, just like in the old days. "It's the young guys who say, 'Why do I want to diversify? I'm going to the moon,'" Albukerk explains. But those who are more seasoned instantly see the wisdom in what he has assembled. "Ours is really a product," says David Lipa, an EB Exchange vice president, "built on the misfortune that so many had during the bust." ..."

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