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Boundary Capital in the Press: Finance Digital, Why Some Investors Are Going The Extra Mile

Boundary Capital > Internal News > Boundary Capital in the Press: Finance Digital, Why Some Investors Are Going The Extra Mile

Our Managing Partner Dan Somers talks to Finance Digital talking about why some investors are going the extra mile.

Investing in early stage technology businesses is a risky business. If you get it right investing in a disruptive business like WhatsApp or Alibaba can generate huge exits: a whopping $22Bn and $25Bn respectively (Sequoia Capital turned $60 million into $3 billion thanks to WhatsApp).  However, there are so many ways it can go wrong: too early for the market, too late, inappropriate management team, product market-fit, IP etc. The odds of making it are smaller than the odds of failure.

Conventionally you also need a lot of cash: Many of these success stories take a lot of funding, and arguably some of the biggest VCs in the world, especially in Silicon Valley, have the funding clout to help ‘make’ the market even if the product is not the best or unique. Uber is now on its 16th funding round, absorbing $12Bn. Whilst this is extreme, VentureSource Dow Jones shows that the average rounds is c. 4 whatever the economic cycle.

Whilst many accept this as the status quo and choose to invest elsewhere, there are many entrepreneurs and angels who succeed time and time again and returns are typically very concentrated on a minority of very successful investments. Only 10% of all angel investments generate 90% of the returns. So, are these serial successful investors outliers or is there a special something they are able to bring?

Well, many of the more consistently successful VCs get cited because they have experienced investors, sometimes entrepreneurs themselves, and often with a focus and supporting processes. So, could this be the secret to successful early stage investment and should investors be prepared to invest more than just their money?

Enter stage right a new style of early stage tech investing:‘mammalian’ investing.

You can read the full article here.