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Scott Kupor from Andreessen Horowitz talks about conditions needed for start-ups to grow, the future of venture capitalists (VCs) in a globalised world, and the potential drawbacks of a VC-dominated market. Entrepreneurs now have more choice when identifying financiers. Kupor suggests that VCs try coaching, mentoring, and providing post-investment solutions for their portfolio companies. In return, entrepreneurs should understand venture capitalist logic. Companies with better ‘founder-product’ fits and storytelling skills are more likely to succeed.
Looking ahead, Kupor argues that areas including computing-driven biotech, financial services, and core enterprise infrastructures interest him. On a global scale, the VC scenes in China and India are growing fast, but both markets are hard to break into. Europe has a well-developed ecosystem but is subject to the free flow of human capital post-Brexit. Finally, Kupor warns against the current wealth transfer from the public into the private market in the US, saying this creates inequality problems and is detrimental to the US economy in the long run.
Why does this matter? Having brilliant ideas turned into products or services that impact the lives of many is always good news for the economy. But is the entrepreneur’s business model solid enough to create value? And are VCs’ financing decisions rational enough? The recent flops of high-profile unicorns in the public markets one of many notable testaments to Kupor’s comments. As tech giants such as Alphabet also aim at areas that Kupor has interests in, we can anticipate new fields from which economic vitality stems. Finally, for the public-private market power struggle and the resulting inequality in wealth, recent moves from the Federal Reserve have shown that regulators are expected involve themselves in this issue and prompt policy-level reforms.