The difference between Silicon Valley and other locales trying to reproduce it has generally not been money. The difference has been smart money. The people who hold the purse strings (founder/CEOs, angels, early-stage investors) have been savvy about what it takes to build and scale a startup.
The problem is that there's always a limited money of smart money available to deploy at any given time.
The question is then, how do you structure a deal to give unsophisticated investors (aka dumb money) returns, which they want, without giving them control, which would ruin the party.
Zuckerberg actually led the way here in 2009 when he got Russian billionaire Yuri Milner to invest $200M in Facebook at a $10B valuation. Everyone thought Milner was crazy then. But he went laughing all the way to the bank.
This is another step in that direction, which deserves our applause.
The problem is that there's always a limited money of smart money available to deploy at any given time.
The question is then, how do you structure a deal to give unsophisticated investors (aka dumb money) returns, which they want, without giving them control, which would ruin the party.
Zuckerberg actually led the way here in 2009 when he got Russian billionaire Yuri Milner to invest $200M in Facebook at a $10B valuation. Everyone thought Milner was crazy then. But he went laughing all the way to the bank.
This is another step in that direction, which deserves our applause.