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Yes, but the reason it's harder to get money for those sorts of businesses is because they're much less likely to generate large returns. The BBC couldn't / did
by revelio 4y ago
Yes, but the reason it's harder to get money for those sorts of businesses is because they're much less likely to generate large returns. The BBC couldn't / didn't want to find any tech entrepreneurs for this article (it's not like the UK doesn't have them), so they focus on people doing contracting or agency work. Of course it'll be tough to get investment in such a low margin and competitive business, VCs don't invest in tech outsourcing body shops either. There just isn't the possibility of large profits without product development.
- vlovich123 4y agoExcept a huge amount of VC plays are basically just gambling on someone succeeding. They don’t care who. So you’ve got 1 success story for every 100 attempts. Sure that 1 generated outsized returns, but that doesn’t help the 100 that failed and lost time and money they could have gotten elsewhere. Additionally, VC plays are often are parasitic endeavors that try to acquire monopoly positions by flooding the market to corner it (ie kill all competition) before raising prices (eg Uber prices raise to pretty close to taxis once the local taxis have been run out of business). If you prevented flooding the market as a tactic, the entrepreneurship model would change drastically. And that is something we used to try to prevent but for some reason we only did it once for the commodities market but let it continue unabashed everywhere else.
- HPsquared 4y agoMost businesses don't generate extraordinarily large returns. Successful tech companies are in the long tail. Where's the investment in the middle?
- revelio 4y agoThat exists but it goes by names we don't use much here like corporate paper, bonds, etc. Bigger than a bank loan but smaller than a (modern) VC round.