Stefanie SchulteJun 18, 2017

One possible reason why we are seeing so many unconvincing business models backed by venture capital (hoping for an exit e. g. through an IPO): The stock market rarely rewards truly innovative business models.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2117516

Obvious explanation given in this paper: The attention span of investors tends to be short, and they are often lacking expertise.

#Economics https://mastodon.cloud/media/MCik9R2fvStOPGkcvFU

Show threadoswriterJun 18, 2017
@stefanieschulte On the other hand, you are seeing a rise in small investors backing "unconvincing business models" on crowdfunding sites. Often a slick marketing presentation will convince people that a ridiculous product is commercially viable.
Show threadKlaske Wijkstra 🌻
@oswriter @stefanieschulte Yes, I don'understand how useless products can be popular in crowdfunding. Sometimes the product is excellent: Puzzlephone for example or a shop where they try to avoid plastic by refilling. Puzzlephone has a lack of funding now, unfortunately.
Jun 18, 2017 at 5:03pmAmaroq