Re:New Tech Incubators Put Finances First
by eldavido on Tuesday November 14, 2017 @12:01AM
(#15692802)
There's a middle ground here guys.
If you're talking about 2-4 million seed rounds, sure, back a great team. But when you're talking about nine-figure equity raises, you probably need a tenable financial model.
Another thing: software is high-margin. A lot of dumb VC is getting thrown into low-margin reinvention of relatively old business models (food delivery, hotels, livery), evaluated through software-like metrics. Maybe finances matter in low-margin scale businesses. It's just not as important in businesses based on pure software/design/IP-driven innovation.
If you're talking about 2-4 million seed rounds, sure, back a great team. But when you're talking about nine-figure equity raises, you probably need a tenable financial model.
Another thing: software is high-margin. A lot of dumb VC is getting thrown into low-margin reinvention of relatively old business models (food delivery, hotels, livery), evaluated through software-like metrics. Maybe finances matter in low-margin scale businesses. It's just not as important in businesses based on pure software/design/IP-driven innovation.