Bad, Bad VC Investments*
November 20th, 2007 by 
Amish Parashar
Our involvement in the Venture Capital / Investment community is hardly a secret on this blog - our group partners with pre- and post-funding companies to help with excellent execution.
The folks at InsideCRM have compiled a list of The 20 Worst VC Investments of All Time, their commentary is insightful and an interesting look into the side of the industry that rarely makes headlines. Of course, high risk / high reward investing means that some companies will succeed spectacularly, some will yield small profits, small losses, or break even, and some will hemorrhage money. The difference between spending wisely on necessary parts of your business model and squandering a institutional money becomes obvious in these examples:
Think Ikea not Aeron if it doesn’t increase your sales:
“Webvan’s “major purchases included $1 billion for warehouses, enterprise servers and more than 100 Aeron chairs.”
Know your customer:
“…advertisers didn’t see the appeal of the low-pay demographic AllAdvantage offered. This company represents $135 million in venture capital down the drain.”
Raise enough to start making money:
“…promising solution simply didn’t have the cash to hang on until the software could be launched.”
More facts and insight at InsideCRM, thanks to them for a great entry!
* the cliche about 20/20 hindsight seems to apply particularly well - retrospectively these are bad investments, at the time of funding they obviously seemed like wise, profitable endeavors to many smart people. In my opinion, this emphasizes the importance of a relentless focus on execution while you meet milestones - or getting the partners and team to be able to!
Posted in Entrepreneurial, Outsourcing, Solutions, Start-up, Venture Capital | 