Automation World’s David Greenfield penned this article about research from the Industrial Internet Consortium that points to how IoT is “turning the venture capital model upside down.” In part Greenfield writes:
Last year, the Industrial Internet Consortium’s Thought Leadership Task Group commissioned a project with New England Partners to find out “what was changing, how companies were evaluating new opportunities, and what were considered best approaches” when it came to IoT-related investment across industry.
According to the Industrial Internet Consortium (IIC), they found that traditional investment models “simply don’t work” when it comes to IoT-related investing. One venture capital executive told the IIC that “IoT is turning the venture capital model upside down.”
So what’s so different about IoT-related venture capital (VC) investments? Let’s start by revisiting the basic VC model, wherein the investors are typically influential in determining a company’s management team and who have an exit strategy planned for just a few years after the company’s founding so as to make the highest amount of return for the smallest investment. As IIC states in its research report, the traditional VC strategy is essentially about the “fastest and most lucrative exit strategy possible.”
Definitely worth reading, especially if you’re focused on the industrial internet. Read the full article here…