Wednesday, April 21, 2010

Venture Capital

I was reading this article on venture capital - and it hit me; Can you imagine a doctor coming into the surgery in the morning and saying 9 out of 10 choices I make today are going to be wrong but don’t worry 1 out of 10 will be hugely successful – any other industry apart from venture capital would have seen these people/business practises bounced a long time ago.

I think what this means for the future is that whilst investors will be placing fewer bets their success ratio will go up as ‘dogs’ are going to be weeded out earlier (eg bright idea X with no rev model).

I’m a founder of a startup but even I when I look at some of my competitors I think some founders are “turning the business of raising money” into their end goal instead of building a successful business that is self supporting without investment.

There are a lot of dogs that should never have received funding and this isn’t good for either founders OR investors.


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