This was a question recently posed on the website

The interesting and hugely important thing about the folks at is that they are trying to bridge the reality chasm between entertainment games and economic games.  This, I believe they are rapidly learning, is yet another game.

So, sure, I’ll play…

The questioner asks that the respondents keep in mind the things that matter when raising money.  These are called the initial conditions:

  • Traction
  • Team
  • Technology
  • Validation

The hypothesis is that the way start-ups raise money today is out dated, inefficient and a huge time sink for entrepreneurs. Perhaps there is away the process could be made more fun for all parties, waste less time and still demonstrate traction/team/tech and validation.

No new game here. 

These are the same initial conditions of the game that is currently failing many great entrepreneurs (ostensibly, gaming entrepreneurs).

Ask any child to create a game and they will almost always modify the initial conditions.  If a playground game of tag is mismatched, they’ll play ball tag or introduce a boundary instead.  If the ball won’t go through the hoop, they’ll change the ball or the hoop.

If you can’t win a game playing by the rules, don’t play the game or change the rules

Likewise, I believe that a great deal of the problem with start-up funding has to do with the astonishing absence of a knowledge inventory system – that is the first thing that needs to be built before we can approach a new answer to this old question.

A company like Boeing (for example) has an inventory of every rivet, panel, and wire that goes on an aircraft and they nurture that inventory with intensity. The objective is the ability to predict the likelihood that an aircraft can be built given the set of parts that exist in the inventory. The real problem is largely in predicting the likelihood that the knowledge inventory exists to turn all those rivets, wires, and panels, into serviceable aircraft.

This is not the way startup fundraising – or even the question above – is formatted.

A computer hardware engineer can look at an inventory of computer parts and tell you the specifications and/or range of devices that can be built. They can also tell you what parts they need in order to increase the probability of success and they can tell you what parts will be left over unused after the devices are created.

The analogous condition is that a fundraising effort would look at a set of knowledge assets in a community and predict what ventures can be executed successfully given the inventory.  We should also be able to determine what knowledge assets are missing which would increase the likelihood of success.

An Idiot’s Guide to Probability and Statistics

The beauty of predictability is that these new enterprises can not only be capitalized, but they can be securitized and risk may be diversified. That is, they can be gamed.  That’s the definition of money and that, I believe, is the objective of the question.

Build the knowledge inventory and all the money in the world will have no other place to go. That’s the game that we need to play right now.