Salesforce.com?
Are VC’s overlooking, ignoring, and missing the next potential Salesforce.com, Microsoft, Google, or Amazon Web Services?
39.6% of the U.S. population are People of Color.* But, this is how VC’s invest today.**
The illustrates an unacknowledged problem in the traditional VC world. That VC investment decisions, in fact, often are:
not merit based
not completely rational
not data-driven
not based on an enormous (dare I say, as many often claim, nearly limitless) universe of business idea submissions
I assert that the chart below from 2008 could be just as applicable today as it was 12 years ago.***
Today, traditional VC’s often fish from the same over-fished pond which often leads to:
Group Think: Funding the same or similar ideas and/or fighting over what is judged to be one of the next elusive “great ideas”
“Me too” or FOMO (Fear of Missing Out) Investing: How many scooter rental companies have been funded in the last few years?
Overlooking, ignoring, or outright missing the best ideas: How many great ideas are not even seriously considered today because these entrepreneurs don’t fit the “profile” of what traditional VC’s want to and/or are used to seeing?
*https://www.census.gov/quickfacts/fact/table/US/PST045218
** The data in this chart can be debated ad nauseum (i.e., with higher or lower numbers) since the reporting of this information is haphazard but my qualitative and quantitative research shows that it is directionally/proportionally on target.
***The Funded- The Canarie is Dead: Something is Wrong in Venture Capital – Q3 2008. https://www.slideshare.net/guest1c3ad/thefunded-canarie-presentation