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Good quote: the info-based economy just doesn't require that much capital, so investing mammoth sums almost always leads to lower, not higher, returns. Someth
by dpapathanasiou 19y ago
Good quote:
the info-based economy just doesn't require that much capital, so investing mammoth sums almost always leads to lower, not higher, returns.
Something to keep in mind when discussing valuations and raising capital.
- jamongkad 19y agoHmmm that's a point worth thinking about isn't it? I wonder what's PG's thoughts on this...
- byrneseyeview 19y agoEr. He may be talking about diseconomies of scale (it's harder to get a high return invest $1 billion than investing $1 million), which would be nothing new. Or he's claiming absolutely lower returns (earning $5 million on a $10 million investment versus earning $2 million on a $20 million investment), in which case he's almost always wrong. There are a small number of cases where a startup would have lasted longer if they'd raised less -- but there's still a pretty strong correlation between having lots of capital and getting a high absolute return.