Re:Hard Startups
by URSpider94 on Wednesday February 26, 2020 @04:20PM
(#22427456)
I think one problem is opportunity cost for the VC. Arguably, they have to spend as much time on diligence for that .25MM investment as for a 10MM one. Put another way, to deploy a $125MM fund, you’d have to do 500 of these microinvestments.
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Not just the diligence. Also the time post investment to mentor the founders and deal with various problems that crop up over the year. No startup older than a year or two that hasn't seen at least one major crisis that could have killed the company (and in many cases it does).