Are VCs interested in social issues or only technology companies?

Every interest of a VC has a technology base. Our innovations in agriculture are based in technologies. Our innovations in transportation: technology based.

Too many are of the mind when “technology” is said that it only means internet or metal machines.

There are entrepreneurs working to solve the issues in political transparency and accountability, there are many ways in which entrepreneurs are working to address the U.S.’s flawed social security model, technology is what will enable a solution to our very broken healthcare systems. I know you’ve seen it in education.

Only two things create value on business : innovation (applied technology) and marketing. I didn’t coin that economic fact, economist Peter Drucker did about 40 years ago.

His point, said otherwise, is that a business only doing one or the other, or neither, isn’t nearly as valuable.

So if you’re putting capital to work investing in high risk new business, where would you put it??

A business that is only innovation, without a market, is only an invention or patent. That has no real value. It’s pure technology for technology’s sake – and no, VCs don’t have interest in that.

A business that is NOT innovative and is only a market can be huge! Think Coca-Cola, Tide, Kellogg, real estate firms, accounting firms, etc. Notice that some of those exist because of an innovation but they aren’t further evolving – they are pure market based companies. This is where most value comes and VCs MAY have interests here.

But in that second scenario, consider why and where investors may have a startup stage interest… Coca-Cola was an innovation! That was technology applied to beverages. And because of the market for it… boom! Same with detergent or the invention of breakfast cereals.

Accounting firms are fundamentally not fundable. But what was therein? Innovation: Quicken, Mint, etc.

Real Estate firms? Not VC fundable. But Zillow was.

VCs seek companies with both innovation and market. Period. That’s the secret most books and blogs fail to summarize. The most important things a startup can do are invest in marketing and innovation. The later means technology. Technology doesn’t mean code and robots.

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