It's also worth making one of the key assumptions of the post explicit.
the author says
If the funding platforms cannot attract the best deals, then investors will not make any money.
the key assumption that's baked into that statement is that everyone universally recognizes the 'best deals'. Of course that's not certain. The wisdom of the crowd may be better than VCs at recognizing the 'best deals'. I can easily imagine 'best deals' that the crowd identifies that VCs wouldn't fund.
>> the key assumption that's baked into that statement is that everyone universally recognizes the 'best deals'. Of course that's not certain. The wisdom of the crowd may be better than VCs at recognizing the 'best deals'. I can easily imagine 'best deals' that the crowd identifies that VCs wouldn't fund.
Wholeheartedly agree with your statement - but keep in mind that VCs typically get access to way more information than what's available through a crowdfunding site.
My guess is this is because most VCs cannot really discern trends, predict the future, etc - even though that is what they claim to do. ( The best ones can, to some extent )
So I would guess, based on this data, that crowdfunding equity will perform just as well as average VC or better, net of fees
The best VCs just have good deal flow. IE, the wildly successful startups go to them first. I don't think the VCs with great returns are better at guessing.
It's also worth making one of the key assumptions of the post explicit.
the author says
If the funding platforms cannot attract the best deals, then investors will not make any money.
the key assumption that's baked into that statement is that everyone universally recognizes the 'best deals'. Of course that's not certain. The wisdom of the crowd may be better than VCs at recognizing the 'best deals'. I can easily imagine 'best deals' that the crowd identifies that VCs wouldn't fund.