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"Public/Private partnerships usually do not pan out unless you have competent administrators ready to fight for the best deal on your orgs behalf." No - they f

"Public/Private partnerships usually do not pan out unless you have competent administrators ready to fight for the best deal on your orgs behalf." No - they fail 95% of the time because government administrators have no clue how to be running VC investment vehicles in the first place, which is why they have to hire people like Thiel. I don't think it turned out so badly. 'Bad' would have meant all the companies went bust. A public/private 'investment vehicle' that actually funds successful startups is a huge win - because it's rare. Not to be too defensive of Thiel - but one could argue that it was Thiel's participation that made the fund successful. Most of these government VC things fail badly, and it's one of the things that is way, way out of their competency. It's possible that the structure of the org could have been done a little bit better, but then possibly it would have been hard to attract someone like him. The governments goal was more along the lines of trying to spur entrepreneurial activity - they got that + a little bit of profit. That they didn't get more is not a bad thing. In the vast majority of cases - they would have failed to spur activity - and lost a pile of money. So, the situation should be characterized as a 'win' just not as good as people would have liked.

vorg 10y ago
> The governments goal was more along the lines of trying to spur entrepreneurial activity - they got that Virtually all the fund's investment went into one company (Xero). If Thiel had already decided to invest in that company anyway (a plausible scenario), then his deal with the NZ govt is equivalent to receiving a free call option (if I remember my Options Theory correctly). And no entrepreneurial activity would have been spurred.
- edblarney 10y ago
  I'm not making the case that Thiel's involvement may have been marginal - rather, simply that it could have been material. But more so the general case: Governments do some things well - but not VC. And that if it requires collaboration with more aggressive VC's to spurn activity, well, then that's not so bad because it's very hard to do.

vorg 10y ago

> The governments goal was more along the lines of trying to spur entrepreneurial activity - they got that Virtually all the fund's investment went into one company (Xero). If Thiel had already decided to invest in that company anyway (a plausible scenario), then his deal with the NZ govt is equivalent to receiving a free call option (if I remember my Options Theory correctly). And no entrepreneurial activity would have been spurred.

edblarney 10y ago
I'm not making the case that Thiel's involvement may have been marginal - rather, simply that it could have been material. But more so the general case: Governments do some things well - but not VC. And that if it requires collaboration with more aggressive VC's to spurn activity, well, then that's not so bad because it's very hard to do.