The basic idea of good money and bad money is that the type of money a manager accepts carries specific expectations that must be met. These expectations heavily influence the types of markets and channels that a venture can and cannot target. The very process of securing funding forces many potentially disruptive ideas to get shaped instead as sustaining innovations that target large and obvious markets. Thus, the funding received can send great ideas on a march towards failure.
As emergent ideas are being nurtured during nascent years, money must be patient for growth but impatient for profits.
When winning strategies become clear and deliberate ideas need to be carried out then money should be impatient for growth but patient for profit.
- Clayton Christensen, Disruptive Strategy, HBX