Reading 'Venture Capital, the Patron of Innovation'
I've spent 20 years at companies that were 'once' startups. Perhaps, as an individual, it was an attempt to be at the edge of venture capitalism while building a life. Those companies, in their heyday, used creation and innovation as the main ingredients for revenue and stock price increases, advocating for a better world. Every year, when I attended company-wide events, I felt inspired by the mission and sense of accomplishment. However, at some point, I couldn't shake the feeling that all my time and effort were being used solely to consolidate the system with even greater revenue.
And people wear down when that happens.
“Venture Capital, the Patron of Innovation,” which even has a hint of a humanistic touch, was a perfect introductory book. I admire the author's ability to explain complex content in a simple, step-by-step manner. In fact, I rarely encountered experts who could easily explain the basic concepts of corporate finance, which don't necessarily need to be complex.
“Venture capitalism makes money through creation and innovation. The goal is to change the world for the better.”
It's a thrilling definition. However, it's also a definition that is remarkably easily pushed down in priority. Humans are frail, and everyone has uncomfortable periods in their lives. When I visited California the year before last, the sunlight was abundant, the air was pleasantly dry, the wine was cheap and good. It was a neighborhood where large sums of money had nowhere to go. I understood, to some extent, the brightness and optimism of the venture capital industry born in such a place.
Within my company, we once introduced a software financing program as a new business. Sales representatives joked that I was 'playing with money,' but I now understand that this joke defined the essence of the industry. The reason I don't regret 'playing with money' is because I know that, at times, it provided necessary timely support.
The nature of the industry is hoping that 0.5% of companies will grow 100 times. I wonder if that kind of relaxed optimism really works in Europe or Asia. A Korean VC representative I met last week said it was difficult to break into the US or Singapore markets, focusing on technology. He said that they are currently focusing on cultural content. This makes me wonder if Korea's strengths lie in culture and people. Or is it because only companies optimized for the Korean market are growing? The maximum number of potential customers is the upper limit of a startup's value. How do companies optimized for the Korean market achieve x100 growth?
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