
What Nikola Tesla vs. VCs video says about the state of Silicon Valley - mkuhn
http://gigaom.com/2013/05/19/what-nikola-tesla-vs-vcs-video-says-about-the-state-of-silicon-valley/
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nickpinkston
If you want to hear how Tesla, Edison, etc. actually went about funding /
building their companies - check out: "American Genesis"

It's a history of the human / social part of this period of technology. So
interesting to hear about J.P. Morgan essentially angel investing in Edison /
Tesla + all the other unknowns like Elmer Sperry, etc.

[1] [http://www.amazon.com/American-Genesis-Invention-
Technologic...](http://www.amazon.com/American-Genesis-Invention-
Technological-
Enthusiasm/dp/0226359271/ref=sr_1_1?s=books&ie=UTF8&qid=1369077550&sr=1-1&keywords=american+genesis)

~~~
EvilLook
Noblesse Oblige is dead. The ultra-rich hoard their wealth. They won't even
invest in their own country by paying their taxes without tax shelters. What
makes you think they would invest in something that might benefit others?

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sgrove
Bill Gates? Warren Buffett? Laurene Jobs? Zuckerberg? Ron Conway?

I don't know what qualified as ultra-rich, but "investments" the wealthy/rich
bracket in SV (including new-comers) also fails to back up your assertion.

~~~
k__
The problem is, we let them choose where to spend their money, so everyone in
need depends on their mercy. They're like the Kings and Queens of our time.

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NoPiece
_They’re all looking for the next Facebook or the next Twitter, but no one
wants to look for the next Juniper or the next Intel or even the next ARM._

The author didn't substantiate this claim. The only actual example he came
with was the Tesla hypothetical. I'm sure it is true that there is a lot of
money chasing easy short term ideas right now, but his only real world example
of clean tech shows there is money out there for big ideas. Even bad big
ideas. I'd like this article if it were actually about some companies with big
ideas who needed money and couldn't get it.

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johnrob
The internet and mobile have created opportunities to make large amounts of
money faster than ever. You can't blame the VCs for choosing a quick billion
vs a slow billion. Along the same lines, the referenced VC deals of the past
(Khosla + Juniper) were not comparing those opportunities with the hyper
growth startups that we see today.

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justinhj
You change tack not tact although maybe some companies should change both

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kepano
This begs the question, how did Tesla actually do it? Ultimately he was driven
by the inventions themselves, not the business models. This was his genius and
his failure.

Licensing the patents worked but it's also worth looking at Tesla's
relationship with George Westinghouse who became a patron more than an
investor.

What's the avenue for a Nikola Tesla today?

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ImprovedSilence
>> What's the avenue for a Nikola Tesla today?

Not sure you want to end up like Tesla. He died broke and alone. I wouldn't
try to emulate his avenue, only his genius... If such a thing is possible.

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joeag
Maybe (eventually) crowdfunding, assuming it ever gets through the rulemaking
process of the SEC. And it's not just the $1M from unaccredited investors, you
can raise unlimited amounts of money from accredited investors, so the amount
of capital you need wouldn't be a limiting factor. Given the numbers of
investors who are looking for large returns, plus those that have an affinity
for a particular technology, idea, or solution to a social problem, this could
be big competition for VC's and maybe the only route to funding for some
ideas/industries/technologies.

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justhw
If you're wondering, here is the kickstarter to the video.
[http://www.kickstarter.com/projects/dorrian/a-statue-of-
niko...](http://www.kickstarter.com/projects/dorrian/a-statue-of-nikola-tesla-
in-the-silicon-valley)

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jk4930
62% unrelated: Nikola Tesla vs Thomas Edison (Epic Rap Battes of History):

<http://www.youtube.com/watch?v=gJ1Mz7kGVf0>

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michaelochurch
Venture capitalists these days go on social proof largely because of their
career incentives. You don't "make it" as a VC unless you get into a black
albatross deal early, and there's one of those per decade. That's why all the
horrible note-sharing and co-funding goes on. All the VC resources are chasing
the career needs of the agents, not maximizing return on investment (which is
impossible to predict anyway).

Someone is going to win big by working with the mid-risk/mid-growth
"lifestyle" businesses (that currently make most of their money consulting)
but it's not going to happen in VC-istan, nor will it be in Silicon Valley or
New York. Boston has a shot; I'd also say Austin, Seattle and Chicago are in
the running.

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fearless
Isn't the entire premise of venture capital that you only make money off the
big winners? Assuming lifestyle businesses fail at similar rates as venture-
backed companies, the way to maximize returns is to invest in the companies
with the biggest potential upside.

In other words, how many $10/month SaaS companies would it take getting
acquired to match the return of your average $300M VC-backed exit?

Don't say 37signals. 37signals is an outlier in the same way Instagram is an
outlier. The existence of either of these proves nothing.

By definition a mid-growth business will NEVER generate the returns needed to
sustain a venture fund.

I don't think it's fair or the most beneficial to society that VCs only invest
in high-risk, high-potential businesses. But that's the only way the math
could work. You can't argue with math. The only exception would be funds like
YC that can invest very small amounts at very low valuations and make money
from acqui-hires.

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ucee054
_Assuming lifestyle businesses fail at similar rates as venture-backed
companies_

Why would you make such an assumption?

 _You can't argue with math._

I can when you get the math so wrong, like above.

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fearless
Most businesses fail because they run out of money. Do you think getting an
infusion of millions of dollars makes a business more likely to fail?

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khuey
Lifestyle businesses are usually about a modest initial investment by the
founder and then reinvesting modest profits into raising the hot air balloon a
bit. VC backed companies usually start out losing tons of money and hope they
achieve flight by the time they reach the end of the runway.

