Angel Investor Chris Dixon: Why Venture Capital Is Broken
Famous angel investor, Chris Dixon, has been involved in early-stage technology companies including Skype, Overflow, DocVerse, co-founder of Hunch and founder of Collective.
Chris believes the factors which scare the majority of VCs is their lack of understanding of the projects they work on and their insistence to push large amounts of money into start-ups at a higher valuation than necessary.
In this video interview, Chris also talks about his transition from entrepreneur to investor- a decision, he admits, which was “mostly to get into the flow of what was happening on the Internet.”
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July 27th, 2010 at 9:29 pm
Chris is right – the VC industry must go “back to the future”. In the early '70's when venture capital (it wasn't known by that name then) was first started by the likes of Bert McMurtry, Arthur Rock, Steve Merrill, etc. the idea was to nurture early ideas that could be companies and help entrepreneurs grow and build their business. Since then too much money has been raised and put to work too soon and often given to people and teams that haven't a clue how to go about building a business. Complicating that, too many VCs have too little operating experience or any context around company building. The next generation of VC (micro VC – maybe, maybe not) will look more like the early days of VC then the last 15.