Elon Musk likely wouldn’t have been able to fund SpaceX or Tesla if he wouldn’t have been wealthy to begin with.
But the problem isn’t as bad as EY makes it out to be. Chamath Palihapitiya’s Social Capital hedge fund for example doesn’t have this problem as it’s willing to fund startups through all stages. Glooko might otherwise not have been successful.
YCombinator also tries to reduce this problem by instituting their growth fund.
____
To be complete, many series A investor don’t do series B financing is because this creates bad signals in the market for companies where the inve does the series A but doesn’t do the series B.
Elon Musk likely wouldn’t have been able to fund SpaceX or Tesla if he wouldn’t have been wealthy to begin with.
But the problem isn’t as bad as EY makes it out to be. Chamath Palihapitiya’s Social Capital hedge fund for example doesn’t have this problem as it’s willing to fund startups through all stages. Glooko might otherwise not have been successful.
YCombinator also tries to reduce this problem by instituting their growth fund.
____
To be complete, many series A investor don’t do series B financing is because this creates bad signals in the market for companies where the inve does the series A but doesn’t do the series B.