13 May 2005

Overcoming the Problem of Asymmetric Information Through Signaling Mechanisms.

Kevin Laws from Venture Blog on the similarities between Peacocks having sex and making VC investments; Why Are Startups Like Peacocks?

I take his point that signaling in the VC world, as opposed to the Peacock sex world, can be ultimately disadvantageous especially when taken to the extreme. However, its pretty hard to argue a company is doing well unless some of the signals are being flashed. Nothing makes people happy like revenue, especially when its early and in greater volumes than expected, which is not like.......an analogy too far.


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13 May 2005

Overcoming the Problem of Asymmetric Information Through Signaling Mechanisms.

Kevin Laws from Venture Blog on the similarities between Peacocks having sex and making VC investments; Why Are Startups Like Peacocks?

I take his point that signaling in the VC world, as opposed to the Peacock sex world, can be ultimately disadvantageous especially when taken to the extreme. However, its pretty hard to argue a company is doing well unless some of the signals are being flashed. Nothing makes people happy like revenue, especially when its early and in greater volumes than expected, which is not like.......an analogy too far.


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No comments: