Posted by: hdemott | March 3, 2011

How Political Campaigns Are Like VC Backed Start-Ups

Last night I was meeting with a few friends and one of them put forth the supposition that political campaigns were like VC backed start-ups.

His logic was as follows:

The candidate has an idea and starts doing research about whether or not he or she should run for office. This is the proverbial guy in a garage – or sitting at his job wondering how to get out.

He starts to talk to other people about the idea – and some of them are enthusiastic – enough to form an exploratory committee – i.e. Angel financing.

The exploration leads to a decision to enter the primary – more backing is needed, but there is social proof and users(supports) are climbing. This is early stage venture.

You win the primary, but there are others in the category (i.e. you have a well financed competitor). This is round B financing which hopefully will get you to the election.

Looks like the election is a close one and you are running low on cash (how many times have people either heard or claimed that this is the last round of financing). Another round comes in for a final push. Series C? Bridge Round?

Election day comes and the market decides – do you live or die? Do you gain wide acceptance – or do you go down in flames?

Are you Facebook or Friendster?

Interestingly, there are second acts in politics just as in VC. Ronald Regan lost his share of elections – but learned every time and kept coming back. same with Bill Clinton and just about every other politician of note. Founders do the same – dust themselves off and live to fight another day.

Not a bad analogy.

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Responses

  1. Interesting comparison which freaks me out. Exit strategy would require graft or corruption?

  2. You are right….listened to a great lecture at Northwestern at a Complexity conference…the professor talked about how the “Second Life’s ” of this world were the best laboratory for building network theory science………

    Steve


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