8 years, 6 months ago

Evolution of VC Business Models

This week at the Funding Post event in NYC one of the panel discussions focused on how VC model is going to evolve over the next several years.  There were several interesting points made that I would love to get this blog’s readers thoughts on:

  1. Talking only to people you or your trusted network knows (or “we don’t want nobody nobody sent” paradigm) is a limiting and self-defeating factor.  Yet most (almost all) angel and VC groups won’t even talk to anyone who’s not known.  Group think?
  2. The model of investing and waiting years before an exit event leads to payback (and hopefully more) may be great for CPG based investments, but internet and mobile business models move quicker and not guaranteed to produce the exit event.  Therefore a new model may be required for these investments – one suggestion was to use a real estate investment model.
  3. Very few investors talk about the economic benefits of tax liability mitigation due to new investment.  There were two people in the audience who were shocked that including and tracking these benefits as part of the VC business model is not commonplace.
  4. Crowdfunding will have a significant impact on investment community.  Some thought the lead investor paradigm would still be required for projects using crowdfunding platforms, but is that reality or misplaced hope?
  5. Speaking of crowdfunding, has anyone really thought through the implications of diversification requirements of the Jobs Act?
Over the next few weeks, I’ll post my thoughts on these points, but would love to hear what other Business and Enterprise Architects think on how to design the new business model of VC that addresses them.