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Feedback 07/05

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This story appears in the July 2005 issue of Entrepreneur. Subscribe »

Invest With Caution

I found your article on VC firms and their issues("Back in Black," May) interesting. Manyinvestments that tanked, or are on paths to demise, are where theyare because of a lack of upfront market viability validation. TheVCs have their lawyers and accountants swarm prospective portfoliocompanies to validate the numbers, intellectual property andrelated issues. However, they fail to bring in strategic marketingleadership to validate market opportunity assumptions stated in[the companies'] business plans.

If market viability validation had been conducted along with thelegal and financial reviews, the VCs would not have invested andwould have saved their investors millions of dollars.

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