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2016: Two Key Inflection Points

By Shlomo Maital


Two key inflection points (points implying major change) will occur in 2016, according to The Economist’s very interesting graphic. (see above).

       First, for the first time, in a very long time, the world’s wealthiest one percent will hold a larger share of total world wealth than the bottom poorest 99 percent, and by 2020, that share of the wealthy will grow rapidly, to 55 per cent!   This is a key ‘inflection point’ (point at which major changes occur), because I cannot imagine that it will bring anything but unrest and instability in the world, as the wealthy leverage their wealth to tilt political decisions and policies in their favor. Indeed the graph’s sub-text is precisely that – wealth perpetuates itself.

     Second, also for the first time,   crowdfunding, as a source of funds for startups and new ventures, will catch and exceed conventional venture capital. This is a major disruptive change for the large VC industry, and it is a change that has happened with incredible rapidity – from zero crowdfunding, essentially, in 2010, to $35 billion in 2015. It implies a different business model for startups, which now must tailor their messages more toward “crowds” than toward perspicacious (and sometimes, supercilious) venture investors.   Along with the rise in crowd-funding comes the rise in angel investments, funded by wealthy people who are willing to take bigger risks with their money (and achieve higher returns) than with conventional financial assets.

     These two changes have each occurred with great rapidity and will change our world, one perhaps for the better, one for the worse.   They are worth watching closely.

     What other inflection points have you noticed in 2016?  

Which VC’s Offer Seed Money?

By Shlomo  Maital  



 The tables above show VC funds and angels that invested in zero-stage startups in the period Jan. 1 2009 through Aug. 21  2014,  in the U.S. and in Europe.   If you have an early stage startup and are seeking funding,  perhaps you should ‘pitch’ to one of these funds. 

    But notice:   How very few investments were made, in two huge areas, U.S. and EU, in  2009-2014.   VC funds, it is well known, have capital, but very little ‘venture’.  Seed money, and zero stage investors, are scarce everywhere, because the risks are so high, and because it is so difficult to pick winners at such an early stage. 

    I recommend that you consider bootstrapping – get your business going with just your own savings.   The farther along you are, the closer you are to a prototype, the   more the VC’s will listen respectfully to your pitch.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital