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If I understand this blog post correctly, it seems to be suggesting that sovereign wealth funds would be potential investors for startups and that they would be
by matrix 16y ago
If I understand this blog post correctly, it seems to be suggesting that sovereign wealth funds would be potential investors for startups and that they would be ideal investors because they would not be seeking a short-term exit/liquidity event.
That seems unlikely to me, given the risks inherent in startups, and the fact that the VCs drive for rapid ROI is arguably an important source of focus for proving/disproving a business model before you burn through too much capital.
- DomreiRoam 16y agoI think that the characteristics described in the article would make this funds very good VC. They could divert some money to invest in specific domains funds. They would probably get some good return in money but also achieve some strategic goals and some middle-term economic growth.
- akharris 16y agoYou might be right if they invest in small enough amounts. But if they try to invest at the size necessary to matter to their own portfolios, that's when you would have issues.
- greg_holsclaw 16y agoToo much cash infused into a new or developing start-up can actually destroy the incentives needed for the start-up to be successful. Not needing to budget well and prioritize features (because we have cash to do them all) fights against the do the first things first, and do them well mentality needed to move a budding idea into an actual revenue stream.
- akharris 16y agoI think you're misreading it slightly. It's not that SWFs are the ideal investors for startups, it's that they're pushing a ton of money into the ecosystem and distorting it.