VCs Hurting, Not Helping, Entrepreneurs

Venture Capital

from the well,-of-course dept

Well, as someone who believes that a very large percentage of startups that are looking for venture capital will find themselves in a worse position if they find it, I can understand the latest column from Robert von Goeben saying that venture capitalists are hurting startups more than helping them in many cases. Of course, he’s saying that to bring attention to his own fund, which he thinks avoids some of those pitfalls (sidenote/confession: von Goeben turned me down for funding a few years ago for a startup I was working on at the time for exactly the reasons he describes in the article – basically saying that we were “too small”, even though his fund focused only on seed stage investments. Though, of every VC who turned us down, he was probably the nicest about it in telling us exactly why and giving us suggestions – most other VCs simply say “let me think about it” and then refuse to take your calls until they hear you’re getting money from another firm.). While I agree that venture capitalists would serve entrepreneurs better by being much clearer about their investment process, most VCs I know claim they don’t have a real process. So much of the investment decision seems to come from a gut feel that most probably don’t want to block out any potential companies in case it’s the “one” investment that they want.