Thursday, March 18, 2010

The future of venture capital

Venture Capitalist Mike Maples gave a talk last month at the Future of funding event in Silicon Valley. He made an intrestesting point in the fact that it is not always the biggest VC fund raising startup that become successful. Microsoft raised only $1M in VC funds before they became public. EBay more recently raised only $5M in VC funds. However, both firms worth now several billions and the VC firms made huge homeruns exit strategies.


Mr. Maples pinpointed on the importance of identifying what he calls "Thunder lizards", potential disruptive market leader. A perfect situation, is when there is no real competition out there getting funded. He calls this being “non consensus right.” That’s the sweet spot for him. The key is to attack a huge potential market, with an emphasis on “potential.” You want to be right, and you want to be one of the only people to see it ahead of time.


It appears that 9% of the funds of VC firms creates 91% of their overall profits. The same is true with Research & Development. Generally, 10% of patents in a firm creates 90% of the value of the firms.


You can see his whole presentation in the comment before this one.


Louis Rhéaume

Infocom Intelligence

louis75@sympatico.ca

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