Author: Alana Levin, Variant Fund Investment Partner; Translated by: 0xjs@Golden Finance

When I was young, I was fascinated by the concept of the marketplace of ideas.

The original idea was that people would go online, post the first few sentences of their idea, and if people thought the idea was good enough, they would bid for the right to build it (and see the rest of the post). Builders who hopefully had the relevant experience or willpower to make an idea come to fruition would use the marketplace to find inspiration, and the person who came up with the idea would receive a small compensation for sharing it.

There are many reasons why this structure doesn’t work. But now, more than a decade later, I think I’ve found another form of the marketplace for ideas: early-stage VC. The investors who write the first check for a startup can sometimes help actually generate the product idea. Sometimes they’re even the ones who bring the idea to the world. Almost by definition for a first-time investor, the future opportunity is unknown. As a result, early-stage venture capitalists are often rewarded for actively expressing what they’d like to see realized.

It’s a marketplace for ideas. Early stage VCs can put ideas out into the world with the goal of having the right people see and be inspired by the idea. Hopefully, the Builder will then reach out, either to discuss the idea further or to seek funding. VCs are well incentivized: if the idea is good, the opportunity to invest and share in the proceeds can create economic synergy.

One of the core problems with 12-year-old Alana’s version of a marketplace for ideas is the ownership of ideas. Venture capital solves this problem: even if a hundred people have the same idea, the benefit is in finding and picking the best person to implement it. Likewise, even if someone else had the idea completely independently, maybe they saw you publicly thinking about a similar concept and decided to contact you. 12-year-old Alana’s marketplace for ideas rewards people for having ideas, whether or not those projects succeed. Venture capital aligns the financial interests of the idea generator with actual execution.

There are few markets that put “buyers” and “sellers” on the same page. One of them is my favorite early-stage VC.