Discerning where to invest one’s money will always remain a liability, or risk, for firms. As discussed during our Finance 1 class, most startups will seek out venture capitalists. In this article, Intel Capital, as of November 4th,2014, “ announced $62 million of investments in 16 young companies…”. Arvind Sodhani, the head of Intel Capital indicated that “in the technology continuum that runs from wearables and the Internet of Things to big data analytics – and everything in between, including silicon, smart devices, PCs, the cloud and data centers.” Undoubtedly, for Intel to invest such a large sum of money, especially in startups, is a huge risk. To minimize this insecurity, companies must conduct thorough research and testing methods. This enables them to build confidence in hopes that their investment will be rewarding, and that the success of their venture is sustained. For instance, Rovio’s profits grew rapidly when Angry Birds was introduced. However, as stated in our readings, it seems as if this growth was short lived. Looking for a simpler structure, Rovio “[planned] to cut up to 130 jobs in Finland, or 16 percent of its workforce”.
Personally, I would re-evaluate investing $62 million, as I handle my money conservatively. If I were in the position of Arvid Sodhani, I would also be hesitant to finance startups involving drones, especially because of the misuse and controversy surrounding this new technology.
But what is the probability that these investments will be a success? We’ll have to wait to find out.
“…maybe sometimes it’s riskier not to take a risk. Sometimes all you’re guaranteeing is that things will stay the same.” – Danny Wallace, Yes Man.
Sources:
http://www.goodreads.com/quotes/tag/risk-taking
http://www.forbes.com/sites/georgeanders/2014/11/04/drones-and-eye-trackers-inspire-intels-62-million-venture-spree/
http://www.theglobeandmail.com/technology/gaming/gaming-news/angry-birds-maker-rovio-to-cut-up-to-130-jobs/article20889656/
http://cdn.bgr.com/2013/06/intel-sign-23.jpg