Even after the historic year of 2020, VC markets improved in 2021, with founders raising 157 percent more funding in the second quarter of 2021 than the previous year. As of July 2021, global VCs have invested $268.7 billion, surpassing the entire amount spent in 2020. VC capital flow in developing nations, where our business Seedstars focuses its efforts, has increased by 40% year on year but still accounts for less than 4% of worldwide volumes while accounting for the bulk of the world’s population. Whether or not you believe this is a bubble, one thing is certain: capital is a commodity.
Some capital will flow more quickly than others will, and investment conditions must be addressed, but assuming all else is equal, the true value is found elsewhere. It is all about the information, connections, and helps that an investor can provide. It is not only a question of market perception or a discernible trend.
De Santis Breindel inquired of CEOs about the most important factors to consider when selecting a venture capital company. The capacity to give value to portfolio firms beyond capital came in second, followed by the firm’s reputation. So, how has the business world reacted to this?
The term “smart money” entered the VC lexicon at some time, alluding to the idea that some money came with highly sought-after knowledge and the risk of crowding out other investors. Today, we have the VC “platform” because of the concept’s development. The smart money was a catchier term, but it was not institutionalized enough to become anything formal.
The notion of a platform, on the other hand, allows for more creativity but perplexes the majority of founders (and even some platform administrators). The main questions: What is a platform, exactly? What value does it add? Is it something you will need as a startup? What criteria do you use to assess it? Continue reading.
A commodity is anything or service (“products” or “activities”) [1] generated by human labor[2] and available for general sale on the market in classical political economy, particularly Karl Marx’s criticism of political economy. Even if they are not made specifically for the market or non-reproducible items.some other valued things, such as human labor power, works of art, and natural resources, are considered commodities.
Adam Smith, David Ricardo, and Karl Rodbertus-Jagetzow, among others, disputed this issue extensively. In economics, value and price are not synonymous words, and both liberal and Marxist economists have struggled to explain the specific link between worth and market price.
