After four years in venture capital I was taken aback when I realised I’d never heard any one ask, ‘what’s the purpose of venture capital?’
The reason for this probably has a lot to do with the question being as fluffy as the answer seems obvious. The purpose of venture capital is clear: to generate financial returns by funding innovation.
But this statement — at least to me — felt just as two-dimensional (and as much of a cop-out from wider responsibilities) as the Friedman doctrine of profit maximisation. In his words,
“…there is one and only one social responsibility…
Do more, we’re told. You’ll be happier when you do more. This is because when you achieve more, you’ll be more. ‘More of what?’ you say. ‘More worthy,’ they say.
People who achieve lots are admired by society. People who do little, well, we forget about them, mostly.
We equate doing more with being more worthy. Do well at school so you can be more. Do well at your job so you can be more. Achieve mastery and you’ll be more. Help lots of people and you can be even more. …
Earlier this week I was lucky to get early access to a beta version of OpenAI’s latest generative pre-trained transformer model (GPT-3) — a new platform technology that can be used as a sophisticated AI-assistant without having to write code.
As someone who isn’t a software engineer, I was still able to experiment and demonstrate use cases that can improve productivity, boost creativity, and accelerate learning and education.
This ease of use — where non-technical people can so easily leverage their creativity to benefit from AI — has got me just as excited as I was when I interacted with…
Venture capital is a power law business: most of the underlying investments fail¹ while a tiny fraction generate the bulk of returns. This is in contrast to normal distributions where most outcomes cluster around some central value.²
The chart below — which roughly follows a power law distribution — shows that most investments (65% of companies) don’t work out but a few (4% of companies) can generate 10 to 50 times your money or more.
When it comes to making venture capital funding more accessible and diverse, the question of pipeline always comes up. And if we take the black ethnic group as an example, one could ask: what’s the number of black-led tech startups you’d expect to get seed funding in the UK annually?
Since less than 1% of incorporated businesses raise a seed round, my napkin maths suggests that we’d expect around 10 black-led startups to get seed funding per year. However, an aspirational number could be as high 30, assuming perfect alignment with demographics.
My numbers are likely wrong and I’d love…
I’ve been lost for words over the murder of George Floyd. It brings to mind centuries of brutal racial injustices against black people in the world and it truly is devastating. My heart goes out to the victims and all who are in pain.
There’s clearly a ton of issues here— racism is pervasive but takes many forms which are sometimes easily dismissed — and though it can all feel like too much to solve, we each have an urgent duty to do something about it.
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I don’t claim to…
Whenever you set out on a new venture you benefit from studying what came before. All great acts do this. They do it not only because it accelerates learning but also because it helps identify benchmarks against which future performance can be judged.
On exceptional occasions, it’s possible for a new act to challenge incumbents while completely crushing prior benchmarks, and in the history of venture capital —something I geek out on more than I should — no fund has done so more dramatically than the aptly named Benchmark Capital.
What’s become evidently clear over the last few weeks is that the COVID-19 crisis is exacerbating already existing social inequalities across the board. Sadly, we are already seeing the acute impact of this in hospitals: 35% of COVID-19 patients are BAME people despite this group making up just 14% of the UK population (there’s lots of reasons for this but socioeconomic status plays a major role too.)
The world is awash with data and it’s growing exponentially. In 2012 around 2.5 billion gigabytes of global data was generated daily. By 2025 that number will balloon to 463 billion gigabytes per day¹, thanks to smartphones, autonomous cars, drones, wearables, 5G, and other new technologies.
Coupled with this growth we’ve seen an explosion in data breaches and irresponsible data practices. For instance, in 2005 there were 157 data breaches in the USA, exposing 67 million records. By 2014 data breaches were up by almost 500% to 783 incidents with 86 million records exposed. …