What Effect Does Taking Venture Capital Have On A Company’s Percent Chance Of Success (On Average)?

That is kind of like asking what chance of success a marriage has in succeeding. At the point of dating, statistically, the odds are bad. But that should not stop you from trying. It very much depends on you, your drive, and the partner of your choosing. And more importantly, who to avoid. There are many factors at play here, and beating the odds is what the drive for success is all about.

However, not just the odds, but the “rules” of the game are stacked against you (and evolution). Unfairly, unjustly, and unnecessarily. Let me explain.

I never wanted to belong to a club. As a former part-time venture capitalist I can tell you – from personal experience – the excessive investor socialism, collusion, lack of wherewithal on Sand Hill Road, and avoidance of risk of venture capital in Silicon Valley has over the years turned innovation’s arbitrage virtually incompatible (see the first-ever State of Venture Capital) with finding outliers of innovation (the reason why I got out, and someday will go back in, differently). Under the macro-economics it deploys, venture capital has predominantly turned subprime, and subsequently with it the innovation it can detect.

We have built an innovation arbitrage that destroys the game from the outset. Like a referee in soccer, never having played the game, and not knowing what the rules are — a reason why the game has become such an awful spectacle to watch.

That is, of course, if you understand the difference between macro and micro on an evolutionary scale. That the opportunity for innovation with renewable socioeconomic value to strengthen the evolution of humanity is hushed by a parade of pillage-and-plunder of unsuspecting greater-fools we reward with financial returns today.

Does that mean all hope is lost? No! Does that mean you need to screen your investor carefully? Yes! Does that mean you need to follow your compass and find an investor willing and able to support yours? Yes!

Unless that is, you too enjoy taking greater-fools for a ride. In that case, and to close the loop on the marriage analogy I began with, be sure to behave like a woman who picks a man for his money, deserving of the kind of reciprocity from a man who chooses a woman for her boobs.

 

Join Georges October 27-29 in London, at the 2021 Climate Change Forum.

Let’s lead the world by example with new rigors of excellence we first and successfully apply to ourselves.

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