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"Rent Seeking" Say this works out in a big way & 2-3 cities take up this $30m challenge. The essay suggests $1m to move a startup, which suggests that having a

by netcan 18y ago

"Rent Seeking" Say this works out in a big way & 2-3 cities take up this $30m challenge. The essay suggests $1m to move a startup, which suggests that having a startup in your city is worth (more then) a million. Why not offer them a million to stay (or half a million if they'll take it)? What if the cities start bidding against each-other for the 'best' startups (assuming they end up with some mechanism for choosing the best ones). What if start-ups form specifically to take advantage of this scheme? What if angels/VCs that happen to rank highly on this list have all their investments get poached & presenting it as a benefit of taking their 1/4 million? The perverse incentives, gaming & such might make this impossible to implement as a large scale government/municipal scheme.

pg 18y ago
Picking startups based on the investments of eminent angels would protect against most gaming. They're not going to change their investment criteria based on what's happening downstream of them.
- yummyfajitas 18y ago
  The ability to get government funding increases the success probability of various startups. What happens downstream will affect success rates. I.e., if flagsfororphans.com goes well, VC's win. If it gets into trouble, the possibility of future government funding may let the VC's recoup some of their investment. This makes VC's prefer flagsfororphans.com to satanictitleinsurance.com, which obviously does not have the same possibility of government funding.
  - pg 18y ago
    Probably not that much in practice. Startups that would have succeeded may succeed faster, but startups that would have failed will still fail. More funding never seems to save bad startups. It just makes them die slower.
    - netcan 18y ago
      Even if we accept this, to avoid all sorts of distortions you would need all market players to believe this.
  - anamax 18y ago
    > The ability to get government funding increases the success probability of various startups. How about some supporting evidence?
    - deleted 18y ago
      [deleted]

by netcan 18y ago

pg 18y ago

Picking startups based on the investments of eminent angels would protect against most gaming. They're not going to change their investment criteria based on what's happening downstream of them.

yummyfajitas 18y ago
The ability to get government funding increases the success probability of various startups. What happens downstream will affect success rates. I.e., if flagsfororphans.com goes well, VC's win. If it gets into trouble, the possibility of future government funding may let the VC's recoup some of their investment. This makes VC's prefer flagsfororphans.com to satanictitleinsurance.com, which obviously does not have the same possibility of government funding.
- pg 18y ago
  Probably not that much in practice. Startups that would have succeeded may succeed faster, but startups that would have failed will still fail. More funding never seems to save bad startups. It just makes them die slower.
  - netcan 18y ago
    Even if we accept this, to avoid all sorts of distortions you would need all market players to believe this.
- anamax 18y ago
  > The ability to get government funding increases the success probability of various startups. How about some supporting evidence?
  - deleted 18y ago
    [deleted]