By PBN Staff
NEW YORK â€“ There are four important lessons to learn from Rhode Islandâ€™s 38 Studios disaster, according to Fortune Magazine Senior Editor Dan Primack.
In order to prevent the next 38 Studios, Primack says politicians need to stop playing at being venture capitalists.
â€śMost professional venture capitalists lose money, so why would amateurs in political office do any better?â€ť asked Primack in his article â€ś4 lessons from Curt Schillingâ€™s 38 Studios fiasco.â€ť
If politicians insist on pretending to be venture capitalists, then they should share in the risk, said Primack, adding that â€śthe most egregious partâ€ť of Rhode Islandâ€™s $75 million loan guarantee to 38 Studios was that it required no validation from outside investors.
In addition, â€śdogma mixed with dollars can be toxic,â€ť said Primack, pointing toward Schillingâ€™s outspoken conservative values.
Although the former Red Sox pitcher famously endorsed limited governmental power, he â€śbeggedâ€ť for film tax credits or a payment deferral when his company was unable to pay the interest on its loan.
â€śNot only was Schilling betraying his own public values, but he was also putting his company in a vulnerable position,â€ť said Primack.
Primackâ€™s final piece of advice was that it is difficult and rare for someone at the top of one field to reach the top of another, unrelated field.
â€śSchilling did try to hire experienced gaming execs to help fill in the blanks, but ultimately he was an ex-ballplayer in charge of a digital content corporation.â€ť