What Is Venturing?

The verb “venture” is custom made for people who are eager to bet on the future. Merriam-Webster provides three key definitions:

  • To go somewhere that is unknown
  • To start to do something new that involves risk
  • To do, say or offer something even if you are not sure about it

Venture capitalists and angel investors are, of course, well-known for betting on the future of business ventures. They provide capital to startup companies or to small companies intent on expanding. “Venture capitalists are willing to invest in such companies because they can earn a massive return on their investments if these companies are a success,” notes Investopedia.

On the other hand, if they make enough bad bets, they themselves can suffer huge losses, as occurred to far too many venture capital firms during the infamous dotcom bust of the late 1990s.

So, venture capitalists are, in essence, practical and action-oriented futurists.

Yet, they aren’t the only “venturists” in the game. These days, there are more and more opportunities to wager on the future.  They include:

  • Gambler Forecasters: Refers to those willing to spend money on prediction markets. Such markets facilitate trading on the outcome of events. The “market prices” reflect what large groups of people think about the probability of certain events. PredictIt, for example, is geared toward political predictions.
  • Crowd Funders: Refers to those who fund creative projects and business ideas through crowdsourcing tools. Kickstarter is probably the best known of these crowdfunding platforms, but there are many others, such as Indiegogo, Appbackr, and RocketHub. The beauty of these platforms is that the people who fund projects basically pledge money, usually small amounts, to help projects get going. Yet, taken en masse, these pledges can send key market signals. The Kickstarter funding of the Oculus Rift virtual reality headset, for example, sent such a strong signal that Facebook eventually bought the the company for $2 billion.
  • Entrepreneurs and Personal Investors: Refers to those who are building future-looking companies, spending their own capital (and time) or borrowed capital to start business ventures they believe in.
  • Traditional Investors: Refers to everyone from traditional financial institutions to their clients.
  • Embracers of New Financial Services: Refers to those who are running and taking advantage of the new fintech services.
  • Students: In a very real sense, students who invest their time and money in specific courses of study are placing bets on the future. Since the 1970s, there have been significant increases in the percentage of students pursuing certain types of degrees deemed as having greater market value. As a health professional degrees rose from 3% of all degrees to 8.4%, whereas a shrinking proportion of students are earning degrees in education, social sciences and English. Market value is not, of course, the only criteria students use for selecting degrees, but investing in such degrees is certainly a form of venturing.

The bottom line is that venturing remains an underutilized concept in the fields of forecasting and prediction. That makes little sense, considering that investments dollars tend to flow toward future products and services that people deem most likely to succeed.

Leave a Reply