Will These Guys Kill The Next Google?

from Knowledge@Wharton (via Forbes)

Venture capital firms are in the business of funding promising entrepreneurs. The conventional wisdom, which some say has fallen by the wayside as older firms have matured, is that returns are better when VC firms are entrepreneurial–nimble, forward-looking, well-connected and armed with an appetite for risk.

A new crop of investors–dubbed “super angels”–are trying to bring that model back into vogue, making deals that now giant firms like Kleiner Perkins Caufield & Byers and Sequoia Capital might have done in their younger days.

More here.

,

One Response to Will These Guys Kill The Next Google?

  1. Jackson Beltrandi November 19, 2019 at 6:57 pm #

    Reading this article 9 years after its publish date gives me the advantage of judging the decisions made by these “super angel investors.” It is cool to read how different the world was just nearly a decade ago. To my surprise, there was Twitter and PayPal, as mentioned in this article. However, those are just the two modern day tech websites which were mentioned. The article’s title, “Will these guys kill the next google?”, is relatively contradicting. No, investors and fund managers are not going to kill promising ecommerce companies, Google is. Amazon, Google, and Apple were and still are a three-headed monster in terms of NASDAQ, these big tech companies dominate their industry and will try to kill any hopeful ecommerce startup. Although simple investors may think this is the case, “super-angel investors” attempted and succeeded in diversifying the technology sector. These types of investors were lucky to have invested up to $10 million in tech startups (web-based software, social-networking tools and platforms, and web-based advertising). Could you imagine investing $500,000 into Instagram (Facebook) in October of 2010? Facebook bought Instagram in 2012, so if you were to have purchased equivalent amounts of stock in Instagram and Facebook before the merger, your portfolio growth would be astronomical. Despite that future growth, it is not easy to have convinced an investor in 2010 to put their money into advertising and social media. Before the growth of the technological age, it was typical for American workers to put all their money into 401ks or hard stocks; hardware, retail, clean technology (Microsoft, Apple). No one could have predicted that Amazon, Instagram, and Twitter would be able to dominate American interest in the way that they have. This is what makes this article so enjoyable, investors such as David Hsu were right in their predictions! According to Hsu (Wharton), “the back-end technology is commoditized. So the question is can you [instead] find a good idea and people who can execute on that?” He was able to predict that not only would tech startups have lengthy time before failure, but that they would boom and be great investment options.

Leave a Reply