http://www.newsome.org/2006/10/gospel-according-to-fred/ Kent Newsome on technology, music and life Sun, 05 Feb 2012 23:43:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://www.newsome.org/2006/10/gospel-according-to-fred/comment-page-1/#comment-4240 Davis Freeberg Sun, 08 Oct 2006 10:38:00 +0000 http://clients.emmense.com/newsome/?p=3245#comment-4240 Sorry Kent, but I'm going to have to respectably disagree here. Google doesn't buy companies because of what Bloggers say they buy companies based on their MBA types say. VC's play a valuable role in society by taking risks that the ordinary investor can't afford to take. Many of their investments are only $1 or $2 million in size and for every homerun they hit, they strike out on 9.Some companies do go public and fail, but many public companies fail as well. It's not the fault of VCs that people lose their money, it's people unwillingness to research something properly before making bets with their own capital. Because of the risks that VCs must take to get 10X returns, they do fund some businesses that end up never getting an exit strategy and who shouldn't have recieved funding to begin with, but that money does more good then harm. When entrepreneurs and inventors know there is a financial benefit to innovation, then it gives them a strong incentive to continue to develop new products and services. If you have a beef with those companies going public, then you should be addressing the investment banks that are selling the IPOs to their clients. They are by far much more responsible for the individual investor getting burned, then the VC firms that are bringing them the product to sell in the first place. Sorry Kent, but I’m going to have to respectably disagree here. Google doesn’t buy companies because of what Bloggers say they buy companies based on their MBA types say. VC’s play a valuable role in society by taking risks that the ordinary investor can’t afford to take. Many of their investments are only $1 or $2 million in size and for every homerun they hit, they strike out on 9.Some companies do go public and fail, but many public companies fail as well. It’s not the fault of VCs that people lose their money, it’s people unwillingness to research something properly before making bets with their own capital. Because of the risks that VCs must take to get 10X returns, they do fund some businesses that end up never getting an exit strategy and who shouldn’t have recieved funding to begin with, but that money does more good then harm. When entrepreneurs and inventors know there is a financial benefit to innovation, then it gives them a strong incentive to continue to develop new products and services. If you have a beef with those companies going public, then you should be addressing the investment banks that are selling the IPOs to their clients. They are by far much more responsible for the individual investor getting burned, then the VC firms that are bringing them the product to sell in the first place.

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