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> The rise of ICOs and crowd funding provide a strong counterexample. The crowdfunding provisions of the JOBS act are nearly a decade old now, which is the hor
by paulgb 6y ago
> The rise of ICOs and crowd funding provide a strong counterexample.
The crowdfunding provisions of the JOBS act are nearly a decade old now, which is the horizon of a typical VC fund. Has there been a single company that has returned well to investors? (Honest question, I haven't looked -- but I've seen some pretty suspicious looking pitches enabled by the act)
> Ideally the best startups would be funded by revenue and bank loans.
This is basically what happened before venture capital. If it were a more efficient way of funding startups, VC would not have emerged as an industry.
- ghaff 6y agoCertainly, absent the VC model (or some other wealthy investor model), it would be much harder to scale businesses that are capital-intensive and/or aren't profitable in the short-term. So presumably absent VCs, you'd have a lot fewer crappy tech startups but you might also not have the success stories--or at least it would have taken them a lot longer to get there.
- dumbfoundded 6y agoOculus started on Kickstarter. I believe GlowForge is a unicorn and started on Pebble.
- paulgb 6y agoAlthough the naming is confusing, crowdfunding in the JOBS Act sense enables small-time investors to invest for equity. It’s different from crowdfunding in the traditional, product sense which is essentially just a preorder and was legal before the JOBS act.