Gary, true. But why do we talk about fake entrepreneurs or real entrepreneurs not prepared for the VC funded route or like I call it the Relay race.
Why isn’t anyone saying anything about Venture Capitalists? They are the ones picking the winners and losers, true it’s not all on them, the founders are accountable but I heard this data recently, from Scott Sandell who apart from Managing Partner of NEA was President of the NVCA.
There about 6000 people who call themselves VC’s. They receive new capital commitments per year of $20–30B. On average they invest that money in about 1200 startups every year.
Many years later:
About 5o go Public per year (IPO’s are declining) — that’s 4% of the 1200
Another 50–60 get acquired in a way that makes for very attractive returns — that’s 4–5% of the 1200
But if you peel the Data a bit you see that a huge percentage of the startups that are bringing in super great returns for their LP’s are 10 per year — that is rounded up 1% of the 1200
As a ball park figure it is about 100 to 200 VC’s/people which are the ones bringing (the ones who chose the startups to invest — thats 1.7–3.3% of the 6000 people who call themselves.
Now why is the focus on startups ONLY and nobody is asking why first the non performing so called VC’s still have their job, and two a large percentage 5 years into their first fund (remember until and the NVCA average is 8.2 years you don’t know the winners and exist don’t occur) raise a second one, earning a handsome 2–2.5% management fees.
THAT GARY IS SOMETHING I WOULD LIKE YOU TO ALSO BE PUBLIC ABOUT IT. YOU MAY ALREADY BE. But as Brad Feld said the centre of an entrepreneurship ecosystem should be the entrepreneurs, and the rest part of it. But without entrepreneurs Venture Capital as an asset clas just would not exist. But Google fake or failed entrepreneurship and >80% of the first 5–10 pages are “how to pitch an investor”, how to raise your series A, etc. So the system is broken, VC’s are the centre of the ecosystem (except may be from the fall of 2013 when the word Unicorn was coined until the fall of 2016 where valuations were huge, the competition between VC funds was fierce and the sense of entitlement of these Unicorn founders was enormous. Now there is a correction, good startups will be funded, but will be at much lower valuations and will take longer and more in dept DD.