In a strange twist for an asset class built on patient capital and outsized returns, finding liquidity for investors has become a matter of urgency for VCs. On the surface, this is a story about venture capital’s evolution and fund managers adopting more sophisticated liquidity strategies. Pry a little deeper, and you’ll find LPs reneging… Continue reading VC has trust issues, not a liquidity problem
Tag: Startups
The failure of due diligence (in Fintech)
For as long as there has been business, there has been fraud, and ‘cooking the books’ is about as old as it gets. In recent years, the extreme focus on revenue has produced dangerous incentives for founders and investors to cut corners. Those chickens are now coming home to roost. Now a regular feature in tech… Continue reading The failure of due diligence (in Fintech)
Deus ex machina
for VC, the success of AI is existential Imagine entering VC in 2020, full of enthusiasm about a wave of technology that felt unstoppable. Your peers are impressed; it’s a prestigious industry that is perceived as commanding a lot of power (and capital). You have to put aside your personal thesis in favour of the… Continue reading Deus ex machina
Larian’s unfair advantage
This post was inspired by two things I saw recently: The connection between these two items is not obvious, but it is interesting. The lemon problem WeFunder, for the uninitiated, is a crowdfunding platform for (primarily) technology companies. It allows community-oriented startups to sell a small % of ownership to their users and supporters. Unfortunately,… Continue reading Larian’s unfair advantage
It’s all about identifying outliers
What startup investors can learn from sports betting Early stage investing is a complex and relatively new practice, which makes it fertile ground for analogies which can help explain the more abstract concepts to both newcomers and veterans alike. In this particular case, grappling with the intrinsic value of pre-revenue startups, there’s an interesting parallel… Continue reading It’s all about identifying outliers
Startups are the clients of Venture Capital
As a founder learning the ropes of venture capital, you might see VCs as asset managers, with LPs as their customers and your equity as the asset being managed. This is heavily implied by the chain of responsibility: you are required to report your progress to your VC investors who want to see milestones crossed… Continue reading Startups are the clients of Venture Capital
LPs should encourage VC evolution
In a previous article I wrote about the threat of consensus in venture capital. A few days later, Eric Tarczynski shared a fascinating thread about the journey with Contrary, his VC firm. He addressed this point about consensus with admirable candour, summarised here in two points: It’s unusual to get such an unvarnished look at… Continue reading LPs should encourage VC evolution
Generative AI and the Games Industry
This post looks at applications of generative AI in the context of the games industry, but much of the same logic can be applied elsewhere. Adapting to technological evolution With every new technology revolution – web3 most recently, and now AI – there follows a large herd of true believers. It can do all things,… Continue reading Generative AI and the Games Industry
Why venture capital should be consensus-averse
In The General Theory of Employment, Interest and Money, Keynes wrote about investment through the metaphor of a newspaper contest to select the six best looking people from a group of photos, with the prize being awarded to the contestant whose choice most closely corresponded to the average of all contestants. Keynes’ point was that,… Continue reading Why venture capital should be consensus-averse
Screening Pitches
There are five straight-forward questions with which you can quickly evaluate a startup pitch, combining the strength of a proposition with its delivery. These questions bear some some resemblance to the Scorecard Method of startup valuation, which focuses on qualitative measures for early-stage companies, but with an additional focus on quantifying the market need. I… Continue reading Screening Pitches