Jiva Technology

Venture Capital: what does it mean to me?

The finance industry is a funny thing. A Schrodingers cat type of industry that is simultaneously seen as both villain and prestigious place to work. I put that down to the fact that there’s no such thing as the finance industry¬†in the way that there is an aerospace industry or a pharmaceutical industry; just many different loosely connected activities that are brought together under the same roof.

Perhaps the image of an industry is unimportant, but you increasingly hear questions about the role of finance in our society, the financialisation of industries and whether or not finance is a good thing. In the UK, there are loud voices that proclaim we have “too much finance”. There’s the threat of action and when that happens, there’s always the possibility of the baby being thrown out with the bath water.

The venture capital industry is a single segment of the global finance industry, but it bears little resemblance to retail banking, re-insurance or hedge funds. Beginning in Boston in the 1940s, venture capital has become and enormous industry that invested over $170bn in 2017. It backs companies around the world in everything from immunotherapy to green tech and provide the oxygen for startup economies from London to LA and Bangkok to Berlin.

Its easy to forget that the fashionable status of working in a startup is a relatively recent thing. It wasn’t that long ago that established ‘blue chip’ organisations were the preferred home of the best and brightest. Thats no longer the case. Working ‘in a startup’ is a socially acceptable, even desirable thing to do without any reference to what the startup actually does. Cities are rated according to the vibrancy of the ‘startup scene’. A new report sheds some light on how certain cities have become global hubs for venture capital deals and its no coincidence that these cities have been the economic winners of the last twenty years. Over half of VC investment goes to just six cities worldwide: San Francisco, New York, London, Beijing, Los Angeles and Boston. Some cities not traditionally associated with the technology industry, like Bangkok, have seen investment grow dramatically.

The energy and momentum being generated by the startup/venture capital combination is quite breathtaking, but with it comes the responsibility to understand the dynamics of whats going on. Its not enough to simply celebrate the winners; it becomes imperative to support the success of these global hubs whilst helping to share the benefits more widely. It would be a shame if the purpose, global reach and growth provided by the startup/vc ecosystem descended into a battle between perceived winners and losers. There’s an opportunity for this relatively recent and unique phenomenon to help us all, but it perhaps requires a more nuanced approach from all parties.

 

 

 

With all that’s happening in the world at the moment …

With all thats happening in the world at the moment, it would be easy to overlook the fact that we’ve lived through a remarkably benign period in most western democracies these last 60-70 years. Economic growth has moved up and down, there have been some serious issues that we’ve had to face, but not the whole, things have been pretty stable. It seems that is about to change and its worth pausing for a moment to think about those skills that will become progressively more valuable and those that won’t. By the same measure, are there areas of study that move from the backwaters to centre stage.

Politics is definitely back. And not just in the sense that big political changes are underway. As the nation state reasserts itself, does that mean that students of political science or international relations will become increasingly valuable? If business has to take greater account of political risk in an era post-Brexit, will they be hiring more PoliSci graduates than MBAs? What if the entire post-WW2 world order starts to unravel as some have forecast; does that mean that language students or those with International Relations on their cv will become sought after? And then there’s climate change. Will an appreciation of environmental science be something that gets baked into business and political decisions?

I suppose the honest answer is that we don’t know, but perhaps it would be wise advice to expect the unexpected. One thing is for sure, whilst its usually a safe bet that tomorrow will be much like today, there are occasions when tomorrow is nothing like today. One of those days may well be around the corner. A wise student will keep one eye on current affairs over the next few years and think through the permutations that could happen. It seems likely that we entering a period of less international co-operation, with climate change as a reality and with certain technologies moving into the mainstream that will have a profound impact on how we live. Understanding the flow of events is a good way to recognise the signposts, the markers that things are changing. It feels like a good time to be nimble, a time to be on your toes. Because more than anything, change brings opportunity.

 

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