Authors note: This blog, for the most part, is focused on Healthcare and related topics. Perhaps I am stretching the concept of related topics a bit with this post because so much of the Silicon Valley startup industry has rapidly migrated to healthcare. I now get numerous calls, or Linked-In requests, every week to look at some healthcare or health-tech startup. I have been interested in writing a paper on the state of the startup industry for a long time and this has provided a good excuse to put my ideas down in pixels.
I have spent many years in the fabled Silicon Valley, working with startups and investors to develop new businesses in many different industries. Along the way I have seen a lot, some good and some not so good. I have seen good entrepreneurs and investors, and I have lived through a few really bad ones as well.
While much has changed, much has not. Some things have gotten better and others much worse. What has stayed the same is that it is still very difficult to conceptualize, finance and build a business to maturity in a way that is good for founders, employees and investors.
To a great extent I think that the system today is simply stacked against all of us.
I have come to the conclusion it could be much easier and much more effective if we simply did a few things a bit differently. This paper is a little of what I think! Click the graphic above to download your free copy.
America has long been a land of invention and innovation. Having lived through the entire PC revolution, I can see that we have been blessed with massive change to the U.S. and the world due to both technological innovation and a business climate that supported risk capital investment. For the past 30 years or so, this engine of change has been based on the startup business industry. In more recent history the engine has showed signs that it no longer may be what it seems. Some have said as early as 2012 that it is fundamentally and forever broken. Yet, from the pace of young entrepreneurs out trying to start businesses to again change the world, one would never know there is a problem. You’d never know, that is, unless you actually looked a little below the surface.
Entrepreneurs trying to raise money in order to start a business are faced with numerous pitfalls, posers, crooks, charlatans and RPRTrs (Right Place Right Timers) all scattered along what is, for many, little more than a boulevard of broken dreams. We have a cast of characters in both the good, and not so good meaning of the word. We have entrepreneurs, serial entrepreneurs, venture capitalists, angel investors, angel investment groups, super angels, crowd funding, facilitators, “consultants,” deal syndicators, incubators, accelerators and many others. All of these entities want the entrepreneur, or the investor, to think they are “The Answer.” Some of them may be — many more end up being their worst nightmare.
In this paper I try to give an overview of where these characters came from, what benefits they can bring and the kind of harm they can render if we are not careful. I also try to track come of the changes and show how they have built the current dynamic environment. I also ask some questions for you, the reader to think about.
In my opinion, from the entrepreneur’s perspective, the access to smart money has never been easy. More importantly, from the investor’s perspective, it has not been hard enough. We believe a lot of things about the value of the hi-tech, biotech and Internet industries. We also believe that startups are key to our economic future. I am not sure that all we believe is correct. I do think there are some fundamental questions we should answer.
First and foremost, if we are going to have a robust startup business industry, we need to understand not only why startups fail, but how to help them not fail and to bring them longer term viability. You will find, if you read this paper, that there are some things we can do to improve how we develop startup businesses that I thank can have significant long term effects and are relatively simple to do.
This paper reflects on my historical perspective working with startups and investors, what I have observed that worked, and what I have learned that does not. I have condensed a number of very good research papers as to both the evolution and current state of capital access from VCs, angel investors and other sources as well as some excellent reports on why startups succeed and why they fail.
Overall, my conclusion is there are a number of things we should do differently if we want to continue to have a robust startup industry in the years to come. I make a few suggestions at the end.
I hope you will either click the link above or the title and download your free copy. I only ask one thing! If you feel this has merit, forward to people you know and let them read it also. As I said this paper is free and I hope it will circulate and open up some needed discussions.
And as always, I appreciate you reading my blog and hope you find things of value here.