3 ms·
VC investors don't want an all-weather business. And you don't see very many risk-averse investors who are willing to dump their money into startups.
by dahfizz 4y ago
VC investors don't want an all-weather business. And you don't see very many risk-averse investors who are willing to dump their money into startups.
- KerryJones 4y agoI think that's largely true but not absolutely true. What all investors want is return on capital, what VCs are gambling on is that 1/10 (or 2-3 in a 100) are going to be moonshots, they're taking higher risks and hoping for higher rewards. The dichotomy of "higher risk vs higher reward", however, isn't as real as people feel it is. There are low-risk & high rewards style investing (it's the base premise of value investing, whether focused or not). VCs do not want you to lose their money, and so doing something that is predictably bad is not what they want. They do want you to go for moonshots... but again, this is predictably bad. I think you'll be harder pressed to find a company that has continued to do well by over-hiring through pandemic times.