Why or why not?
In some instances, VCs have been an important part of successful market-creating innovations. VCs largely funded many of today’s most innovative companies including Apple, Google, Cisco, Amazon, Starbucks, Costco, Amgen, and Genentech. The market-creating importance and economic impact these VC-backed companies have had can’t be overstated.
Conversely, VC returns have been mixed over longer periods and appear subpar in comparison to overall stock market performance when adjusted for risk and illiquidity. Furthermore, many see the VC industry having evolved toward investments in sustaining innovations in businesses that operate in known markets, not creating new ones.
So, when might venture capital be the best place to launch a MCI? When might incumbent companies be the best place? When are the best results derived from partnership between the two? What about Corporate Venture Capital (CVCs) arms – good idea or poor use of shareholder resources?