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Quote of the Week: Venture Capital? Make Way for Geek Guilds

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March 6, 2014

YCombinator is a VC fund that looks and operates like a guild of geeks, and hardly looks anything like a traditional fund comprised of VC partners with MBAs or finance degrees. They are operators, through and through.

 

Who said it: Dave McClure, Founding Partner 500Startups

In Context: Dave McClure sees “significant changes” in the venture capital industry, in particular he see the emergence of Mega VC funds with over USD 1B under management (such as Andreessen Horowitz, Greylock, Accel, Sequoia, Benchmark, Kleiner, and Khosla); and smaller, more nimble “Micro VC” funds (typically less than USD 100M) like Rocket Internet, Y Combinator and his own venture fund, 500Startups.

The Micro VC is what is really new, and sometimes are also known as super angel funds. He said that traditional VCs will always be needed but they need modernize a bit and embrace the same digital techniques and disruption in the same way that technology companies do. For example, they should be evaluating and using tools like Angel List, Gust, CapLinked, Trusted Insight, Second Market, and many others now emerging as a result of the JOBS Act and financial services innovation. He also talks about the “full service VC fund” that employs business development, HR and other professionals to support portfolio firms. He closes by admonishing investors to seek startups and venture deals beyond borders. “Entrepreneurs can be found in every corner of the globe, and emerging market consumers and businesses are growing and connected everywhere,” writes McClure.

Where we found it: 500hats.com

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