Sohodojo - New Economy Venture Capital and the Nanocorp

In a Nanocorp World, Everything is In Play

As change accelerates, it is counterproductive to maintain the wrappering of entrepreneurs with the companies they form and grow. In a nanocorp world, companies are just as dynamic and ethereal as the products and services they offer! New rules about how the business model of venture capital works will reflect this new reality.

Venture capitalists are still betting on the entrepreneur, but that investment will as likely be direct to the person as it will be an investment in the entrepreneur's company, or companies in the case of the nanocorp 'portfolio' player.

Too radical a change, you say? People fill jobs and their employers invest in them as human resources, or as some now call it human capital. In the Thing-dominant production-line view of the Industrial Era, thinking of humans-as-resources may have made some kind of sense. Such thinking won't 'cut it' any longer as we boldly charge into the 21st Century.

As Peter "Fifth Discipline" Senge says, "You know what resources are, don't you? Things standing in reserve, waiting to be used!" We cannot sustain the ride on Spaceship Earth if this is our collective view of Business and its workplace. Humans are not renewable resources to be chewed up and spit out; humans are the Crown Jewels, unique and invaluable.

This change in the venture capital business model -- decoupling the entrepreneur and his or her companies -- is indicative of the emerging realization that people are what matters most!

Means to a New Economy End... QSBS: Awkward Acronym, Great Opportunity

We already have in place the financial instruments to open up this 'other side' of venture capitalism. It is called Qualified Small Business Stock.

The IRS code provides for a class of investments which are ideal for fostering the kind of dynamic interplay of 21st Century entrepreneurs, companies and their product and service marketplaces. We could tell you about the increasingly liberal reinvestment rules, attractive capital gains provisions, etc. But you would be better served by reading Jack Cummings' Legal Focus column, Qualified small-business stock benefits. Jack's August 1998 contribution to The Triangle Business Journal cogently and enticingly describes the available means to open an important new dimension on how venture capitalists will frame their investment perspectives in the 21st Century.

When venture capitalists' business models look more like the one above, they will be truer to the widely shared belief that it is the combustion of the Entrepreneurial Human Spirit that fuels the economic engines of Spaceship Earth.

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New Economy venture capitalists play side-by-side with entrepreneurs in broader marketplaces of companies, products and services.

New Economy thinking decouples Entrepreneurs and Companies to better accommodate 'emergent' opportunities.