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Why SoftBank Won’t Raise Vision Fund II
VCs that forget they’re a marketplace, do so at their peril
Companies on one side.
Money on the other.
20% commission.
If that sounds like a marketplace, that’s because it is. It behooves venture capitalists to understand marketplace fundamentals as they are inherently marketplaces.
Why Venture Capital is inherently a marketplace
Each year there are thousands of new companies looking to raise venture capital and there are probably even more sources of capital interested in investing.
For investors discovering the right company at the right time requires spending lots of time getting to know startups, becoming skilled at investing in startups, following industry trends, and building a brand and reputation that attracts high-caliber startups. Without VC, investors would also end up making riskier investments because their risk wouldn’t be distributed across numerous companies. The 20% commission VCs charge is probably a great deal!
For early-stage startups, the challenge of finding funding is often just as difficult. Without VC, early-stage startups would have to go and find individual investors…
