I’m re-starting my writing after a 7 month sabbatical. Since then, I’ve seen a *lot* of great shows: “Waitress”, “Hamilton”, “Allegiance”, “Gigantic”, “Natasha, Pierre, and the Great Comet of 1812”, “Dot”, “Disaster the Musical”, “Color Purple”, “Hughie”, “Sense and Sensibility”. It would take me several hours to get caught up on blogging about each and every show I’ve seen as I’ve done previously. The good news (great – actually) is the variety of high-quality theater that’s out there. There’s a lot going on! That said, I’m going to move towards commenting on an article that I read in the New York Times about the risks of venture capital in the technology industry, and how many start-ups actually fail: most. http://nyti.ms/1RazStz (924 Bitly link shares as of 2/28/2016)
What I find most interesting isn’t so much the demographic make-up of funded companies (primarily white males founders receive financing from the same demo in the venture capitalists) but a reference in the article to the minimum threshold needed to avoid failure. 55% of failed startups raied $1 million or less. http://bit.ly/1EyyECe (0 Bitly link shares as of 2/8/2016).
What I’m wondering is whether being able to raise funds above $1 million will help improve the chances a venture will succeed, because it’s a higher bar that needs to be met? Granted we’re talking about the whole population of failed start-ups, and 45% of failed startups have raised over $1 million so in the end the amount of money you raise doesn’t determine whether a venture will fail. However, knowing that most ventures fail, I’m guessing 90% in the tech space, what kind of funding is needed at a minimum? I believe this directly applies to raising funds for a commercial theater production. The average amount raised by failed start-ups is $11.3 million and the median $1.3 million. To me, these numbers look very similar to amounts raised for theater. Are the risks the same? The general rule of thumb is that 1 out of 4 investors get their money back or better, so a 25% chance of achieving a return looks like a pretty good bet, based on my initial analysis.