Midas Capital


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Midas Capital

Midas Capital

Contrary to popular belief, Venture Capital funding or Angel Investment is not a recent concept. Investors have always been excited by the thought of putting their money behind such ideas that would change the course of the world, and in turn, create historic fortunes for them as well.

Angel Investor J.P. Morgan

In 1878, J.P. Morgan placed his bets on the vision of Thomas Edison who believed that his invention of Direct Current (DC) Electricity would transform the world forever. J.P. Morgan was the only one who got excited by Edison’s vision, and everyone else in the investment community found Edison’s work impractical and improbable. He put in massive funds behind Edison to lay the foundation for the Edison Electric Company, which later became General Electric (GE). Edison earned fame, and J.P. Morgan grew richer beyond his own wildest dreams.

Twist in the Tale

Not many people are aware of the twist in the tale of Thomas Edison’s invention. In 1884, Edison was approached by a young engineer, Nicholai Tesla, who believed that his idea of Alternating Current (AC) Electricity was superior to that of Edison’s DC. Tesla believed AC was a relatively safer, less costly and more reliable source than DC. However, Edison and J.P. Morgan failed to see the real value of Tesla’s invention. This is the greatest danger in any business or in any venture capital fund – the tendency to get emotionally attached to the idea, and as a result fail to see logic.

Venture Capitalist George Westinghouse

Industrialist George Westinghouse was impressed with Tesla’s work, and created a capital fund to finance Tesla. Thereafter, a great “power struggle” between Morgan and Westinghouse ensued who both wished to control the future of electricity in the world. The lesson here to be drawn for today’s VC funds is to be constantly on the edge when investing in technology. It is important to go after new paradigms before anyone else does. It reminds one of Microsoft’s delayed foray into the world of Internet, and the phenomenal rise of Google.