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From a fund perspective doesn't this eventually lead to the softbank model? where winners are made through overwhelming capital.
by lumost 6y ago
From a fund perspective doesn't this eventually lead to the softbank model? where winners are made through overwhelming capital.
- borski 6y agoIt can, but that implies capital is the only thing required for good execution, and we know that's not true (as we saw with some of the Softbank failures). However, if you need to make a bet, you make a bet, because for a VC fund, the small chance of an outsized return (that can return your fund) is better than a more likely chance of a 'decent' return, so you often make a bet and double down while it still seems viable. There's a reason Lyft kept getting funded even when Uber raised significantly more.
- kkotak 6y agoCompletely agree. Capital is used to make Kings. Companies like Uber, Lyft, WeWork - won't exist without this. As for quality of the founders, I think, with enough money (and loss appetite), a mediocre team can execute well on an decent opportunity.
- borski 6y agoIt is hard for an incredible team to execute well on a decent opportunity, even with ample capital; the 'it is trivial once you have money' trope is just that, a trope. Money does not make a company successful; financing helps along the route, and helps allow the founders to take bigger risks (with hopefully similarly outsized rewards), but it does not execute for the founders. That part is still on the founders, and is still the most important part of any startup bet; 'can they raise future capital' is certainly a factor in the decision, too.