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David’s Presentation is on Slideshare
David Blumberg, Blumberg Capital gave me a brief interview before his talk. He spoke about his experience as an entrepreneur @Checkpoint a few years ago. He feels that entrepreneurs really add value. As a VC he understands the glory of winning negotiations & making a great deal & he also has to treat it with skepticism because he knows how hard it is to do & how long it takes & how rarely it happens. He decided to become a VC because he has ADD & its a requirement for the job. He’s an insatiably curious person, he loves science & the future. He loves the entrepreneurial spirit. Putting all that together makes for a perfect venture capitalist. He often says a VC needs to be schizophrenic: optimistic & positive towards the future & also skeptical. That dichotomy, that schizophrenia is a very healthy mix. When he was on a Board years ago, the CEO was transgender & he had no idea & he is gay himself. His first fund was started when someone reached out after he talked & he was asked to spend the weekend @Lord Rothschild’s estate in the UK & talk to you about investing in the fund. He called his mother & she said “You’d better dress properly!’ He believes in schumpeter which is creative destruction & that its a good thing! Change is necessary in an ecosystem, it shows that there’s life. There’s never been a better time to be an entrepreneur & therefore there’s never been a better time to be a venture capitalist, especially early stage. Reasons why: 1) product cycles are shrinking dramatically 2) large corporations are realizing that they cant invent everything internally ‘not invented here. He speaks about AT&T who were famous for Bell Labs & now they’ve opened up to have entrepreneurs coming to speak to them. 3) Startup costs in the IT industry have dropped probably 80% so much lower cap ex to start a company 4) operational running costs are lower because of the Cloud infrastructure where you can rent things. 5) Its much easier to Sell as a SAAS model than an enterprise sales model 6) Also there are now 2 huge shoulders you can stand on: social media networks & smart phones. You have very powerful computers that are connected & in the hands of billions of consumers that were never reachable even 10 years ago. The frosting on the cake or maybe the cake, is that the world is getting richer in an astonishing fast rate – the poverty class is moving up into the middle class faster than ever in human history. For 1800 years GDP per capita grew 8.1% a year, no innovation just agriculture. If you owned the land you were rich & if you were a serf you were poor & that was it. In 1800 the Rothschild family & other families started moving capital around to the bond market & equity markets & this enabled capital to move to its highest & best use. So people went from human & animal power to steam, electrical & mechanical power. Then we jumped to 1.25% per year growth in in GDP. From 1975 it tripled & is now growing at over 3% per year worldwide. We live as Martin Luther King said ‘in the best possible time’. Its right now & it keeps getting better!