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by davemthrowaway
5033 days ago
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In view of your comment I regret using the term institutional, I think that really means much larger investors. A quick Wikipedia check shows that technically venture is actually a subset of private equity. What I should have said is: try to think of vcs as investors with a mandate to invest in a specific asset class. Talking about venture capitalists within the context of what they actually are, rather than stretching athletic metaphors adds a lot of clarity to the discussion. It actually fits quite well with the art dealers and a&r guys you mentioned. Both of them are (basically) investors in a very specific asset class. Each of those asset classes has unique qualities and each of those investors can add value in unique ways. Lastly, I think you are genuinely trying to contribute and I concede that I may just be ignorant; however, your approach to commenting doesn't make it very clear what you are trying to say. I would suggest that you dial down the complexity of your writing and reduce your use of equations/ variables when words and sentences would do. |
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A more pointed critique is that these are too simple definitions. Its like saying a student is a person that goes to school. Its the same idea as before at reduced scale.[1] They are threshold definitions.
The point of PGs swans and DM's article here: what is the environment for investing and what are the dynamics of gameplay.
If you want to talk about portfolio theory etc fine. But the conventional wisdom is for all VC's: it's better to copy the <strategy> of the winners and differentiate on the <execution>. Arguably, DM is saying the opposite: we cant compete on the <execution>, so we'll differentiate on the <strategy>.
On the aside, I appreciate the note. I won't overexplain myself here.
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[1] see: http://lesswrong.com/lw/e95/the_worst_argument_in_the_world/