"How to Grow a VC Ecosystem" – Reaction to Forbes Article
Recently, Victor Hwang, wrote a guess post on Forbes about How to Growth a Venture Capital Ecosystem. The article is a good first essay on the topic and I am awaiting his updated post featuring “Rules 2 through 5”. The post highlighted a few issues and trends that are at the heart of BootstrapLabs’ differentiated model when it comes to discovering innovation and early stage venture model.
At BootstrapLabs, we spent a lot of time figuring out some of the issues being raised here and like good entrepreneurs do – and we hope like he pioneers mentioned in the article did back then – we designed a new way to source (potentially disruptive) innovation born outside of Silicon Valley but quickly nurture them in both, Silicon Valley and their country (or state) of origin, building from the strength of those ecosystems, and leveraging what each has best to offer.
We did this with @Prezi and it seems to have worked out for them as well as the ecosystem they came from (Budapest), creating 100+ jobs “back home” and bringing Silicon Valley best practices on how to running and growing a tech startups. Prezi has not yet generated significant liquidity for its founders and shareholders but it is already inspiring Angels and VCs back home to catch the next Prezi..too often people (and governments) think that you can jumpstart an ecosystem by reducing the risk to start a company by providing grants, then have angels come out of the woodwork after giving the wealthy some tax incentives, and double on the amount of companies getting funded by doubling or tripling the amount of money injected in VC funds…well all of this works for a while, new companies are created, new angels invest in startups and VC fund more companies, which in turn hire more employees…but in the end (say 5-7years), all this investment risk to fall flat if exits are not there to reward investors, angels and entrepreneurs…and you can’t force exits.
Where you are born as an individual no longer defines where you live. Why should it be any different for startups or innovation!
They are indeed arbitrage opportunities but the kinds that create real value and augment the pie.
I believe that over time, every ecosystem can be criticized for its herd mentality or put another way “you are a product of your environment” or “you can’t think of it unless you feel the pain”. Silicon Valley might not be exempt as some article have suggested in recent past…but the velocity , mentality and depth of the ecosystem will likely keep it ahead of any others for decades to come. If you can’t beat it, join it, right?
This is where a global and connected view of the world’s hot bed for startups & innovation, combined with local intelligence on the ground can reveal an extremely powerful deal flow and exit engine.
I was recently invited to inaugurate the new Global Startup Support Center, Born2Gobal, in Seoul and gave a speech on Globalization. Enjoy 🙂
Looking forward to your comments and feedback.