Last month I proposed that a new, people-powered model to venture capital be adopted, The Wiki Fund. The post has generated a ton of traffic, great insight and interesting discussion. Most of the comments reasoned that the idea could work; however, government and regulatory hurdles would cripple such a model.
The venture capital sector, like every sector, is going through a “shake-out” stage. On February 23, 2009, Adeo Ressi is hosting an event where Entrepreneurs and Venture Capitalists gather for the first time to specifically address the VC model, and how to get capital in the hands of entrepreneurs. You can view the event here.
Will a new model arise that adopts a “crowd-sourcing” philosophy? Is that even sane? It will be interesting to see how YouBeTheVC does.
Last night an individual posted a comment on the wiki fund arguing that crowds are “inherently foolish.”
Here is his post below:
Just like that, fools in the internet software space think they own the world of venture investing. Look guys, the real model that entrepreneurs are going to switch to is one of three ways: grants, starting with a contract/another business and fund with products, or using corporate money for larger investments. A much-needed shakeout is going on in VC land, across all funds, and everybody thinks they will be the ones to survive. What they do not realize is that nobody needs them anymore. Crowds are inherently foolish, and it is individuals who drive everything anyway, so this idea that small amounts of money will add up only works when it is given away freely, as fundraising shows every day.
What do you think of this? Do crowds lack wisdom? Why or why not?
