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January 17, 2008
Why Early Stage Venture Investments Fail: from Fred Wilson
I tend to agree with his take on why most fail and also on the need to have the flexibility to transform ventures on the fly as most successful ventures changed their plans a couple times. Unfortunately some plans are only discoverable with large capital investment, especially in the clean tech space. Look for lots of capital to be deployed in cleantech, and lower multiples in the end than technology. I doubt you will see 100X returns in clean tech. You just need too much money to scale cleantech.
Fred's summary:
Regardless of whether you have taken venture capital or not, capital efficiency and bootstrapping are critical values. You must keep your burn rate low until you can show without a shadow of a doubt that you have a business model that works, can be operated profitably and is ready to be scaled. Then and only then should you step on the gas.
Posted by Martin at January 17, 2008 10:21 PM
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