Over the past week, I have seen various posts on Startups, VCs, the fundraising process, Startup burn, growth, etc. One particular one that caught my attention was a founder mourning his inability to raise capital for his business while some so-called tech company making less revenue than his company does is able to raise millions of $$ in financing. One critical factor to understanding why some companies raise money and others don't is to understand the asset class itself "Venture Capital", it lends itself to certain types of businesses, mostly technology-driven, with low/zero marginal cost, which makes it easier to scale and finally business that can deliver outsized return (what would be considered unrealistic return in traditional companies). Think about it, which other asset class assumes that 50-70% of its investment will return Zero as in Nil. It's called Venture capital for a reason and most businesses are not built by raising venture capital but if you want to raise VC funds, you need to first and foremost, understand it.
Jayéolá Okuazun
7mo
Good insight, Kayode Oyewole 💡
Investment banking | Venture Capital | Technology
7moKayode Oyewole Do you believe in recent times(circa 2015 till date) the measure of access to funding for both tech companies and traditional companies are at par or vary differently? This is a minor segway but looking at the returns so far in the past decade for the venture capital asset class. One could argue, for our clime (Africa) it serves us well to increase funding to other businesses outside tech companies favoured by VCs who at times (if not alot of times) rely on the traditional businesses and infrastructure to grow so they can grow. Technology is most times a direct enabler of sorts to the traditional businesses which in turn aids the economy which feedbacks to innovation for budding tech companies and their suite of products unless you're a pure software company. To summarise my thoughts I believe there might be a correlation to growth in the tech ecosystem and it's verticals with the growth of the traditional sector This article shares abit further on my context: https://www.linkedin.com/pulse/african-venture-capital-funding-horses-disguised-unicorns-mohamed-txuff?trk=article-ssr-frontend-pulse_more-articles_related-content-card