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Unsuccessful startups, for me, are not the problem. The problem is: a) venture capital coming from government which have very low incentives to not waste money
by tumetab1 8y ago
Unsuccessful startups, for me, are not the problem. The problem is:
a) venture capital coming from government which have very low incentives to not waste money (their goal is usually only to have X amount of start ups) - which leads that capital and talent is diverted to this bad startups
b) since they are zombies, they don't die quickly enough, the resources waste keeps going on (capital, talent, office space, bandwidth, etc.)
- Nicolas_Colin 8y agoYes that is the proper way to frame it :-) Being unsuccessful is part of the startup life. Being a Zombie is not!
- charlesdm 8y agoGovernments have secondary returns -- VC coming from government generally has restrictions (i.e. the money has to be spent on employees). Employees pay taxes. Those people spend their money mostly locally. Even if every euro invested is lost, it'll still be profitable in most cases (because everything eventually flows back into the local economy).
- stickfigure 8y agoThis sounds eerily like the broken windows fallacy.
- charlesdm 8y agoYet this is how these things are set up. I know a VC fund manager solo managing a €50m fund, of which €20m came from the European Investment Bank, and €20m came from the local government. He put in €200k. Just €9.8m came from HNWIs. So he's getting 2% on €50m for 7 years, to invest €40m government money with pretty much no expectation of any return. Not bad, not bad at all. I'm sure "the people" would be outraged if they knew. But they don't.