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> I think it's an indictment of our current system. Do you mean the USA, or tech in general? In the UK, whilst there is VC money, it tends to be less, and mor
by DrBazza 6y ago
> I think it's an indictment of our current system.
Do you mean the USA, or tech in general?
In the UK, whilst there is VC money, it tends to be less, and more focused. I believe the bankruptcy laws in the US vs the UK are significantly different to the point where attitude to risk influences business start ups.
In the US, from this side of the pond, venture capital investment appears very cavalier, with VCs throwing money left, right and centre, hoping that they'll land on the next unicorn. In the UK, VC money is much more targeted on start ups with a plan to profitability.
- lordnacho 6y agoThe longer the easy money, stock-market-may-not-go-down regime continues, the more the lagging VC cultures like the UK and Europe will tend towards the US. I'm not sure how the bankruptcy laws come into this though? Limited liability corporations exist everywhere, and there's mostly no suggestion of piercing-the-veil fraud or dishonesty.
- brobdingnagians 6y agoThat gave me an interesting thought. This would probably tend to make other countries catch up in the software industry, who don't have VC money, because they have to actually compete on merit and profit. This means they tend to take on problems with a real world application. This isn't to say that they don't have funding, but the funding takes a more strategic approach of requiring real developments and profit, whereas a lot of US talent is tied up in adtech giants who cut products or in VC companies with no real path forward.
- starfallg 6y agoWhat we see is the opposite. Money gratituiously thrown at things like Uber and AirBnB destroys any profitability in those market segments and affect business models and profitability in related market segments.
- gumby 6y agoBankruptcy in the US has always been very generous. It’s one reason why many people have showed up here over the centuries. Switzerland won’t give you a visa if you’ve ever had a bankruptcy. In some countries bankruptcy is a crime.
- paxys 6y agoYou are talking about personal bankruptcy, which is irrelevant. Businesses can and do go bankrupt every day in every country in the world.
- gumby 6y agoSorry I wasn't clear. The vast majority of businesses operating anywhere (not just USA) aren't organized as limited liability entities. In the case of this particular tweetstorm, the business was likely not incorporated as the author kept feeding it from his own bank account. Also note a parallel comment referring to the consequences of corporate bankruptcy in the UK. I used Switzerland as an example. The US is an extreme outlier; this has long been cited by many people as a factor in its success (though the belief is hardly universal or there would by now be many others who copied the example).
- paxys 6y ago> In the case of this particular tweetstorm, the business was likely not incorporated as the author kept feeding it from his own bank account. That is a terrible assumption. Of course the business was incorporated. There is nothing stopping you from investing money into an LLC or corporation. That's how VC funding works.
- DrBazza 6y agoRegarding bankruptcy, under some circumstances you can’t become a company director ever again. In the uk it’s not something you can just do on a whim, and wind up a company.