[This discussion is getting really interesting … please chime in, folks …]
I am trying to figure out the seriousness of something that I see is going on in Silicon Valley and elsewhere. I need your help to understand the phenomenon, and would appreciate if you engage in this thread and offer your perspective.
VCs are moving up the entrepreneurship value chain, raising larger and larger funds, and moving farther and farther away from true entrepreneurship. In essence, they are moving to late stage ventures, and becoming Bankers, as opposed to Venture Capitalists.
As a result, there is an increasing void in seed / early stage entrepreneurship. Raising money has become very difficult.
No, early stage entrepreneurship has not stopped. The Angel network continues to play in this, but Angels are not easy to find, so first time entrepreneurs have a hard time locating money to get their projects off the ground.
The other mechanism that is supporting early-stage is serial entrepreneurship. Serial Entrepreneurs, predictably, are funding the seed round themselves, with their own money, and then going straight to their network of VCs to do the later rounds.
This leaves first-time entrepreneurs in a lurch.
My thesis is that many of the world’s best entrepreneurs were first-time entrepreneurs once. Steve Jobs. Bill Gates. Larry Ellison.
By making it so difficult for the new generation of first-time entrepreneurs to get funded, are we throttling a realm of creativity, innovation, and entrepreneurial energy that ought to be nurtured, not smothered?