Business : Venture Capital

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With the exception of some very enlightened specialists, who just invest to develop technology, venture capitalists are in the business ONLY FOR GREAT AMOUNTS OF MONEY AND MONEY ONLY. All the rest, including human lives, respectful treatment of other people, is secondary to them. From their perspective, it's OK to mistreat the clients and workers of a start-up by selling the start-up to a psychopath coropration, as long as the corporation pays well.

An alleviating counter-measure to the psychopath situation might be to construct the business model and the infrastructure so that if any psychopathic behavior occurs at the corporation side, the clients will jump ship and the left-over assets will be useless for any other project. That counter-measure will not help against acquisitions, where a company is acquired mainly for eliminating competition. One mega-corporation can hire another mega-corporation to do the destructive work for it and the job can be the destruction of competitors by acquisitions.

Yet Another Summary of Requirements According to Various Internet Videos

In 2015

  • At least 2 founders, who are not a married couple and have worked together before the founding of the company.

(The division of property in case of a divorce is hindering the business that will be divided. 2 founders back each other up, if something happens to the other one. The prior collaboration experience increases the likelihood that the founders are able to work together in the newly founded company.)

  • The business model must be scalable and the founders must be willing to scale the business in stead of just selling the company for 10 million dollars.

(The venture capitalists want to hit a jack-pot and if the company is sold "on the cheap", "just" earns back a few times the money that the venture capitalists put in, then the "pot" is not "big enough". Some VC-s prefer "hungry", first-time founders to persons, who already have accumulated a considerable amount of money from previous projects. Some VC-s are experienced and smart enough to satisfy the "hunger" of the founders by paying them a few million dollars for moving the company to the scale-up phase and not selling the company for the 10 million.)

  • There is an unwritten rule that a single venture capitalist will not invest in companies that compete with each other.

(Prior to presenting a sales argument to a VC, it saves everybody's time and effort, if the founder finds out, what companies the VC already has in his/her portfolio.)

  • Some VC-s do not care, if they collect their jack-pot by an Initial Public Offering (IPO) or by an acquisition.

(Acquisitions usually mean that the clients of the company will be mistreated, just like the clients of Skype were, where after the initial sale of the company the NSA installed wiretapping module with the help of the Skype engineers and most likely with the full knowledge of the then-Skype-CEO Sten Tamkivi.)

  • VC-s differ in their participation level and form. Some just hand over the money, do not disturb and expect a return ("spray and pray"). Some offer active help at creating contacts. Some try to help at recruitment, but some believe that in principle it is the founders' job to handle all of the company building and running and the recruitment and a like must be totally part of the founders' vision. A general opinion is that the friends and family of the founders (Friends and Family and Fools, FFF) should not do any investing, because, unlike VC-s, who have investment failures as part of their business plan, the Friends and Family and Fools bare too big costs at the failure of the start-up and the FFF even lacks proper risk assessment, because they are blinded by the good opinion about the founder and the failure of the start-up can ruin important human relations, which is too big of a cost for entrepreneurship.

VC-s that invest their own money, are called "angels". The rest of the VC-s practically run an investment bank.