Silicon Valley, California is an area which has a concentrated population of Venture Capitalists and Startups. Its success in creating & supporting innovation & creativity in businesses can be contributed to the wisdom & experience that is intensified here. It is the variety and diversity of the Startup ecosystem and the Investor community that makes it a great place to be extremely successful in business and learn about business.
Venture capitalists have a seat at the table when deals are made and businesses are started and grown. Their business experience & advice as contribution can make the difference between success and failure for startups. In recent times, particularly since the COVID pandemic and Climate Change awareness, it appears that whoever talks the loudest or who has the most money, is listened to by the masses. Venture Capital used to be a very successful cottage industry but since Private Equity became involved in recent times, the results have changed.
Flooding the market with money, such as Private Equity & others, is not the magic sauce, as can be evidenced by recent business disasters in the last few years. Most Venture Capitalists have experience & background as entrepreneurs or from corporations and that is the real key to the success & growth of a startup/business.
From Investopedia: A private equity firm’s strategy is to buy mostly buy mature companies that are already established. The companies may be deteriorating or failing to make the profits they should due to inefficiency. Private equity firms buy these companies and streamline operations to increase revenues. Venture capital firms, on the other hand, mostly invest in startups with high growth potential.
Private equity firms mostly buy 100% ownership of the companies in which they invest. As a result, the firm is in total control of the companies after the buyout. Venture capital firms invest in 50% or less of the equity of the companies.
Most venture capital firms prefer to spread out their risk and invest in many different companies. If one startup fails, the entire fund in the venture capital firm is not affected substantially
Private equity firms usually invest $100 million and up in a single company. These firms prefer to concentrate all their efforts on a single company since they invest in already established and mature companies. The chances of absolute losses from such an investment are minimal. Venture capitalists typically spend $10 million or less on each company since they mostly deal with startups with unpredictable chances of failure or success.
VConVC focuses on the Wisdom and Experience of Silicon Valley Investors who have surfed the waves of Success & Failure since the early days of Venture Capital. VCs interviewing VCs via audio podcasts is our contribution to the Silicon Valley Investor and Startup Ecosystem which now extends to every country. It is a way of bringing Investors’ experience & wisdom to all who care to listen.
CONVERSATIONS NOT A MANIFESTO
Conversation: The exchange of thoughts and feelings by means of speech or sign language
