The Traditional Venture Capital Model Is Broken: What’s Next?

http://thesecurepc.com/vc-model-is-broken-whats-next/

by njess • 16 years ago

8 11 16 years ago

TedBlosser• 16 years ago

would "pool capital from members’ personal investments as well as direct agreements with outside investors" mean that the outside investors would have no say? if they have ANY say or influence, then it would be just like the current model (marrying people without ideas to your idea). This sounds like it is more like "collective bootstrapping", which is an interesting concept...

SomeCallMeTim• 16 years ago

I actually disagree.

As I understand it, the current model is that the people with money give it to the venture capitalists, and that it's the VCs who are the ones who interfere with the start-ups.

Presumably the idea would be that the "collective" would have on-staff consultants who both advise the start-ups and who convince investors that, in aggregate, the start-ups will make money.

Though I think the real problem with the VC model is the necessary "hockey stick" profit chart. The fact that a "lifestyle business" is considered a failure means that lots of functional, profitable businesses are forced to grow to the point that they really do fail.

mdlm4• 16 years ago

Ted,

I'm not quite sure where you are quoting from.

In my model, which I call the Entrepreneurial Collective, there is no distinction between entrepreneurs and investors. There is no such thing as an 'outside investor.'

My goal is to create a model in which there is only one role (entrepreneur/investor) and no one has power over anyone else.

warfangle• 16 years ago

The proposed solution reminds me a little bit of this:

http://thecollectivecontext.com/about/

mdlm4• 16 years ago

Thanks for this link. :) I wasn't aware of it.

Hugging is extremely important as I argue in this video: http://www.youtube.com/watch?v=PemCDigV680

david9272• 16 years ago

I agree that VC is dead for all those reasons and more.

I think what's next is this: http://me-vc.com

Companies have to register in Jersey (the island, not the state), and there are some other legal and regulatory hurdles to overcome, but the future is definitely in micro-equity.

robobenjie• 16 years ago

This is what I want. Hooray.

mdlm4• 16 years ago

Nice. :)

When is me-vc.com going to launch?

david9272• 16 years ago

Probably sometime this Summer; there's a lot to work still ahead. The name will be different, actually. The most difficult aspects of the startup are the legal and regulatory ones.

If you want to know more or be part of the private Alpha, just email me (the address is in my profile).

hpvic03• 16 years ago

Does anyone really think that VC can be "fixed"? I don't think VC is broken - it's just the nature of the beast. Interests rarely align 100% in business.

mdlm4• 16 years ago

I think the VC model can be radically improved for most of us.

The work of Nobel Peace Prize winner Muhammad Yunus is a great example of an alternative to the standard VC model. It gives me hope that we can do better.

The Traditional Venture Capital Model Is Broken: What’s Next?

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