Last Friday SXSW added “Venture Capital for Long Tail Entrepreneurs” to the Core Conversation schedule. Obviously I’m looking forward to leading the discussion; I have been thrashing around the topic in blog posts and conversations with friends for the better part of a year. Thanks goes to Ethan Bauley for originally suggesting I submit the idea to SXSW.
“Venture Capital for Long Tail Entrepreneurs” is an idea that describes the need for a fundamentally different model for for creating and funding micro-businesses in the Long Tail of the economy as our society shifts towards a more personal, collaborative and distributed system of value creation.
I’ve continued to see the themes crop in a wide variety of conversations with friends, entrepreneurs and investors through the year and during my travels; there are a number of people that have seen the same gap and are pursuing a wide variety of approaches throughout the US. As we’ve discussed before, Y-Combinator, TechStars and Launchbox Digital are three obvious examples, but they are merely one approach, applying the same investment model, incenting the same goals, using a different economic structure for a rather specific industry. It’s the same approach with different math.
There are some interesting parallels with Chris Tacy’s core conversation “Do We Really Need VC’s Anymore?”, but the key is that this is not just about the the changing cost structures of startups, the current economic downturn or about the “too small to fail” ethos; this is not a call that “venture capital is broken”, but rather, it is realization of a broader cultural shift that will impact all industries (not just web businesses) as people look for ways to apply the same organizational and economic principles to the broader economy. It’s about finding a model for allocating and deploying capital (money, time and social capital) that can profitably support and encourage a broader, more personal and collaborative approach to entrepreneurship. It’s about reframing the goals, incentives and approaches to creating value.
That’s a lot to think about; looking forward to more conversations from everyone, and of course, come to SXSW and participate in the discussion…
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Background: below are a series of posts building up to and thrashing around the idea. I suggest you start with Venture Capital for the Long Tail (July 21st) as a good introduction, then dig into the April 10th and June 4th posts for the broader “thinking out loud”.
- Is this what we need? Is this what we want? (April 10th) on taylordavidson.com)
- Do we need a new funding model for starting businesses? (June 4th on taylordavidson.com)
- How can we create a funding model for lifestyle businesses? (June 12th on taylordavidson.com)
- Venture Capital for the Long Tail (July 21st)
- Venture capital creates real options (August 8th)
- Want to hear more about Venture Capital for Long Tail Entrepreneurs at SXSW? (August 8th)
- Markets in Everything: Innovation in Angel Capital (Sept 2nd)
- Update: Venture Capital for Long Tail Entrepreneurs (Nov 3rd)
