Once again everywhere I turn my head these days, I see early stage funds. Must be a professional destiny of some sorts. In early 2008, I wrote a scathing piece on the industry.
In 2012, I wrote on the World Bank blog that “I like to think about seed stage investing as behaving per laws of quantum physics versus even early stage investing as per Newtonian physics: a whole lot of strange phenomena happening that can only be grasped by different frameworks. It is no wonder that the outdated “fund management” model fails miserably to bring returns at seed stage." I have been thinking about what to do (as opposed to what not to do) but could not quite find the disruption.
Then in early 2013, I sort of updated my stance formally through a World Bank request for fund proposals.
WIth my increased diplomacy skills, and armed with the Kauffman analysis I said ”the main spirit of ESIF (the name of the fund we were creating) is not to create another venture capital vehicle unless the vehicle found some creative ways to buck the global trend of dismal performance of traditional fund managers investing at this stage…“
After years of being squarely in the industry as a faux outsider, perhaps the time has come to put together that innovation that is sorely needed. Time to disrupt. Or fail at disrupting. Whatever. But definitely time to stop being a critic (no-risk bureaucrat) and do something (skin-in-the-game entrepreneur).
Early stage tech funds suck. Time to do something about it. (So much for diplomacy).