Forbes’ article is a good summary of VC’s dilemma: VC’s want to be larger and avoid risks. Forbes says: “Venture firms raising ever-larger investment funds–which produce ever-larger fees, of course, and rich lifestyles for the VCs getting them–have simply backed too many crummy companies over the last 10 years.” And it continues: “Geoff Love, whose U.K.-based Wellcome Trust is an investor in many top VC brands, said onstage at the conference that he thinks larger funds and fees have made many venture capitalists more risk-averse.”
I think this is nothing new for people who are working in start-up and VC business. But it once again highlights many relevant issues. And especially this is a problem for early phase web and mobile companies. They need smaller money to prove that they can launch a beta version and start to get users and market feedback. During the last six months I have talked with several people who are launching their new web or mobile service and they have been interested to get investors. My advice is to find smart business angels and/or try to make it with so small money as possible, get users, and learn how the business model works. But of course all entrepreneurs haven’t enough money to do it without external investors. Hopefully Grow VC can help them soon.
Tags: early phase funding, VC 2.0, VC trends
