The SiliconValley Ponzi & Unicorn logic: the more money you burn growing, the higher your business valuation…
The thinking that corrupts the best / most sober VCs: • Unicorn? What is the residual value of these loss-making tech companies if the funding was pulled? • What was the balance sheet vs the a,b,c valuations? • VCs are NOT incentivised to invest resourcefully to prove the business model, RATHER the more money you raise (so burn) the more the business is worth • The “Amazon expectation” is a myth • Prices law states that these tech start-ups now have no chance of survival • The debt fueled losses are wrecking traditional markets and sources of revenue Meanwhile the most sober VCs such as Softbank continue to burn $219,000 per hour at WeWork With some hidden threats: • This type of investment plays directly into the hands of the Chinese profitless growth models who will pick up the pieces • Sustainability? With growth at ANY cost? • Intermediator models are causing economic rent and digital feudalism • The Big 4 fueling this with self-serving strategy? Profit = sanity & revenue = vanity has never been a better check? We train execs to fix this themselves using www.winningthinking.uk as seamless part of DD portfolioreview and turnaround
