Hacker News linked to a story by Crain’s New York, a site dedicated to covering New York’s business landscape, claiming the financial impacts brought on by Tumblr’s sale to Yahoo. The story claimed that the deal gave Union Square Ventures 5000% return on its investment on Tumblr based on analysis by research form PrivCo. It also laid out the numbers for Tumblr’s other investors, the actual of which are still undisclosed, that PrivCo calculated based on the information they gathered.
Gigaom reader Ashfaq Munshi responding to a blog post by Om Malik on how venture capitalists would react to a pitch by Nikola Tesla:
The problem is not just the VCs. Young people these days do not spend enough time thinking about the big picture. They are not taught the fundamentals or, more appropriately, they do not care about the fundamentals, because it is too easy to cut and paste in this open source world. How and why things work eludes most college graduates. ask them how something like a battery works, how a computer works etc and you get bizarre answers. Have one of the young hot shots explain to you caching, paging or garbage collection and they just don’t know. what they don’t understand is that for the past decades all that we have done is push computing bottle-necks around and that with the advent of new techniques or technology a new bottleneck (similar to that of perhaps a decade or two ago) will appear and create wonderful new opportunities. But, you have to understand the entire picture to see this happening. How many young people care to think this way? Not many I fear. my 23 year old tells me that guys of my generation know computing far better than those of his. Sad. Hard problems require depth, lots of work and plenty of time. Do the young people today have any desire for this? Unclear.The VC community does nothing to help this problem. A quick buck, spray and pray investing or lemming like investment, actually extinguishes the desire for creating. The key here is creating versus getting rich. After all betting on 10 startups with $500K investment in each is “more capital efficient” than one in which a $5M stake is necessary. Where has “venture” gone from venture capital?Does the world need so many Y-combinator clones? What if the purpose of an incubator was to run a year long contest for the most innovative idea that could be found and then have that idea funded at the appropriate level with proper coaching and guidance so it could succeed? would we be better off? I think so.Let’s think big, get our kids to think big and then place fewer bigger bets that will change our lives for good.