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I completely agree with you that some/many VCs spend money on ridiculous business models. On the one hand, it seems like a waste of resources. On the other hand
by huijzer 3y ago
I completely agree with you that some/many VCs spend money on ridiculous business models. On the one hand, it seems like a waste of resources. On the other hand, you could also say that it's a great way for innovation to happen. Maybe some ideas made no sense at all, but worked and lead to a technological breakthrough? If VCs wouldn't fund moonshot ideas with many millions then who? Apart from a few universities, most universities I've been are absolutely terrible at getting people and resources aligned towards a common goal.
- fakedang 3y agoThere's a difference between VCs funding a moonshot idea and VCs funding some stupid idea. For instance, Amgen and Genentech were founded by VCs, with VC funding, as were Google, Amazon, etc. The difference back then was that VCs actually did their due diligence as part of their duty. Back then, it was much harder to get VC funding in the first place - the science had to be at least 90% sound, the metrics had to be solid, the numbers out with an open book. For example, Google only raised a $25m Series A by the time they were already widely well known, almost a household name. My critique is not about the VC funding model. It's about VCs not doing any due diligence these days but just chasing the next hype cycle.