4 ms·

> The act of doing entrepreneurship or stating up is inherently devoid from profit motives I am assuming one is operating in the for-profit sector. If one is

> The act of doing entrepreneurship or stating up is inherently devoid from profit motives I am assuming one is operating in the for-profit sector. If one is NOT operating in that sector then yes it is all the more reasonable to assume that the enterprise should be focused on solving a problem or creating some sort of intangible value. We can observe this is well with the open-source community, where profit motivation is not the main driving factor. However, I reiterate, if the venture is to operate for-profit then it's potential to be profitable should be for most the aim otherwise it's not solving a problem because it will fail.

Kye 2y ago
VCs aren't banks and startups (in the SV sense) aren't seeking funding to do something tried and true in a new place. A VC invests expecting most of their investments to fail. Banks expect returns, and the things they fund are expected to turn a profit. There are systems in place to claw back assets and funds in the event it fails to do that; and most will, but they're expected to come to the bank with a plan for profit in hand. There are different kinds of bankruptcies to address different kinds of failure. Banks tend to not give loans to people who fail a lot, and the terms get worse with each failure. Meanwhile, in VC-land, the 1/10 startup that brings the profit for the fund could very well be started by the person who failed the other 9/10 times. It seems like if the expectation is, with rare exceptions, most startups won't turn a profit, and there's no real penalty or punishment for repeat failure (because it's expected), it's not a for-profit system. It's a patronage system that periodically mints new patrons.
- rUsHeYaFuBu 2y ago
  I disagree. The VC is there for profit because they expect the 1 win to overshoot the loss from the other 9. They expect potential for profit in all the ventures they invest. Period. And they put forth capital in the amount representative of their belief that a particular venture will turn a profit. Those they believe have more potential will receive more funding/resources than those ventures that seem less favorable. They are not, as you put it, performing in a patronage system, because simply they are not interested in losing their capital.

Kye 2y ago

VCs aren't banks and startups (in the SV sense) aren't seeking funding to do something tried and true in a new place. A VC invests expecting most of their investments to fail. Banks expect returns, and the things they fund are expected to turn a profit. There are systems in place to claw back assets and funds in the event it fails to do that; and most will, but they're expected to come to the bank with a plan for profit in hand. There are different kinds of bankruptcies to address different kinds of failure. Banks tend to not give loans to people who fail a lot, and the terms get worse with each failure. Meanwhile, in VC-land, the 1/10 startup that brings the profit for the fund could very well be started by the person who failed the other 9/10 times. It seems like if the expectation is, with rare exceptions, most startups won't turn a profit, and there's no real penalty or punishment for repeat failure (because it's expected), it's not a for-profit system. It's a patronage system that periodically mints new patrons.

rUsHeYaFuBu 2y ago
I disagree. The VC is there for profit because they expect the 1 win to overshoot the loss from the other 9. They expect potential for profit in all the ventures they invest. Period. And they put forth capital in the amount representative of their belief that a particular venture will turn a profit. Those they believe have more potential will receive more funding/resources than those ventures that seem less favorable. They are not, as you put it, performing in a patronage system, because simply they are not interested in losing their capital.