Social Capital has started investing in startups, sight unseen
"There’s little question that former Facebook executive and venture capitalist Chamath Palihapitiya thoroughly enjoys challenging the way that startups are funded. Because he has the hot hand, so to speak, he’s able to get away with it, too.
Last month, for example, Palihapitiya’s firm, Social Capital, took the unusual step of raising $600 million in an IPO for a SPAC called Social Capital Hedosophia. The shell company will use the money to acquire all or part of a privately held tech company, thereby taking it public and circumventing what Palihapitiya sees as the unnecessarily long, expensive and distracting process of going public.
Now, Social Capital has another trick up its sleeve. It’s beginning to invest in far-flung startups, sight unseen."
QUESTION: Is Social Capital innovating its way into trouble?
https://techcrunch.com/2017/10/25
Social Capital manages $1.8 billion worth of assets and has reportedly deployed two-thirds of its third, $600 million, early-stage fund, which it closed in 2015.
How it works: entrepreneurs from anywhere in the world can fill out a questionnaire, then submit revenue figures and either raw engagement or transaction logs (or both) to Social Capital, including sometimes by granting the firm direct access to the cloud services they use. It’s entirely self-serve. If Social Capital likes what it’s sees, it will write a check of up to $250,000. If it doesn’t, it will at least deliver feedback to the startup regarding tweaks it might make to its business model. (
How can Social Capital possibly know how to improve a company’s business model when it hasn’t even met its founders?
READ MORE > https://techcrunch.com/2017/10/25
Last month, for example, Palihapitiya’s firm, Social Capital, took the unusual step of raising $600 million in an IPO for a SPAC called Social Capital Hedosophia. The shell company will use the money to acquire all or part of a privately held tech company, thereby taking it public and circumventing what Palihapitiya sees as the unnecessarily long, expensive and distracting process of going public.
Now, Social Capital has another trick up its sleeve. It’s beginning to invest in far-flung startups, sight unseen."https://techcrunch.com/2017/10/25
Social Capital manages $1.8 billion worth of assets and has reportedly deployed two-thirds of its third, $600 million, early-stage fund, which it closed in 2015.
How it works: entrepreneurs from anywhere in the world can fill out a questionnaire, then submit revenue figures and either raw engagement or transaction logs (or both) to Social Capital, including sometimes by granting the firm direct access to the cloud services they use. It’s entirely self-serve. If Social Capital likes what it’s sees, it will write a check of up to $250,000. If it doesn’t, it will at least deliver feedback to the startup regarding tweaks it might make to its business model. (
READ MORE > https://techcrunch.com/2017/10/25
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