Wat is er mis met venture capital?
OPINIE VAN GEORGES VAN HOEGAERDEN
In the marriage between the assets of the Limited Partners (money) and the assets of entrepreneurs (ideas), Venture Capital (by Limited Partners often referred to as Venture) as the matchmaker and derivative has failed to perform at scale.
That realization should not be confused with the wide-open opportunity of technology innovation (an 80 pct greenfield). The derivative to innovation is broken, not the capacity of this country to innovate - an important distinction.
What were we thinking?
I have made my opinions about Venture known years before the numbers proved it, not because I consider myself a genius, but because in working in and on startups in Silicon Valley I could see the deployment of investment risk erode and therefor easily predict an equally eroding outcome. The deployment of subprime risk can only produce subprime returns, according to rudimentary economic principles.
The recently spawned statistical hindsight by reporting firms covering Venture returns post 9/11 has suddenly produced a new crop of followers to criticize Venture, with one problem. Hindsight does not produce foresight, and leaves many looking for short-term trailing micro-indicators rather than macro-economic compatibility and rudimentary principles of risk. The latter which provides not only a more meaningful outcome but also is the mantra of the underlying asset we invest in.
Now, some suggest that the solution to Venture is to simply hang in, or use escapism in one of its many flavors to either constrict its workings further, lower risk even more, adjust management fees or exit out of Venture altogether. The bottom feeders of the ecosystem fed by the attention from zealous media reporting (that still confuses stage with risk), popularize the oxymoron of Angel and micro-VC investing that yield even less scalable and smaller absolute returns than VC, and employs even more deflated risk profiles and a debilitating outcome to the production of Social Economic Value public markets care about.
That realization should not be confused with the wide-open opportunity of technology innovation (an 80 pct greenfield). The derivative to innovation is broken, not the capacity of this country to innovate - an important distinction.
What were we thinking?
I have made my opinions about Venture known years before the numbers proved it, not because I consider myself a genius, but because in working in and on startups in Silicon Valley I could see the deployment of investment risk erode and therefor easily predict an equally eroding outcome. The deployment of subprime risk can only produce subprime returns, according to rudimentary economic principles.
The recently spawned statistical hindsight by reporting firms covering Venture returns post 9/11 has suddenly produced a new crop of followers to criticize Venture, with one problem. Hindsight does not produce foresight, and leaves many looking for short-term trailing micro-indicators rather than macro-economic compatibility and rudimentary principles of risk. The latter which provides not only a more meaningful outcome but also is the mantra of the underlying asset we invest in.
Now, some suggest that the solution to Venture is to simply hang in, or use escapism in one of its many flavors to either constrict its workings further, lower risk even more, adjust management fees or exit out of Venture altogether. The bottom feeders of the ecosystem fed by the attention from zealous media reporting (that still confuses stage with risk), popularize the oxymoron of Angel and micro-VC investing that yield even less scalable and smaller absolute returns than VC, and employs even more deflated risk profiles and a debilitating outcome to the production of Social Economic Value public markets care about.