Comments on: VCs Are Not Evil: What Entrepreneurs Need To Know

By: Bankruptcies and the French VC Model | satisfy my soul

Bankruptcies and the French VC Model | satisfy my soul — Tue, 09 Feb 2010 16:59:38 +0000

[...] and cogent post yesterday about the economics of venture capital. Nic also references a similar blog post citing Bill Bryant, a former entrepreneur and now one of DFJ’s US venture [...]

By: Finance Geek » A reminder on the economics of venture capital

Finance Geek » A reminder on the economics of venture capital — Mon, 08 Feb 2010 10:20:50 +0000

[...] the maths of venture investing at a conference in Seattle. This write up is from the Xconomy blog, and in it Bill it explains why VCs need to price in 10x returns: Bryant explained that “Despite [...]

By: A reminder on the economics of venture capital | The Equity Kicker

A reminder on the economics of venture capital | The Equity Kicker — Mon, 08 Feb 2010 10:15:48 +0000

By: Blue Swan

Blue Swan — Sun, 07 Feb 2010 20:36:22 +0000

VC firms were part of the 90s/00s bubble where a rising stock market was confused with accurate picks.

Having been around the industry, the process of applying for and getting VC funding still remains obscure and arcane. My guess is that in 90 percent of cases, its simply insiders loaning each other money to put out something they can prop up to the small investors.

VC will have to be far more open and accessible to be part of the 21st century economy. The farmer in the field, or homemaker in the kitchen may have as valid a business idea as the cubicle worker who wants to make yet another Outlook plugin.

By: Krassen Dimitrov

Krassen Dimitrov — Mon, 01 Feb 2010 03:33:27 +0000

Shorter Bill Bryant:
“we are not evil, we are just stupid”

which is a paraphrase of Hanlon’s Razor:

“Never attribute to malice that which can be adequately explained by stupidity.”

Of course, anyone with a little bit of brain could have picked which investments by DFJ had a chance and which would bomb out. In the case of GreenFuel Technologies, I sent my study to all their partners in 2007, yet they continued pouring money into it, until May of 2009, when it went bust…

By: Bob Crimmins

Bob Crimmins — Tue, 26 Jan 2010 20:39:42 +0000

Interesting piece but I must say that, rather than showing that VCs are not really evil, I think Mr. Bryant has only offered an explanation of why (some) VCs behave in an evil manner toward entrepreneurs. If it is a feature of some VCs models that they must hit an out-of-the-park home run one out of ten times and this is just not in alignment with the interests of the other 9… especially given how notoriously poor VCs are at picking the right pitch to swing at.

By: Chris DeVore

Chris DeVore — Tue, 26 Jan 2010 00:31:26 +0000

Thanks for the analysis, Jasper. Another issue worth noting is that “VC” is not a monolithic asset class – there is huge variation in fund size and investment approach across the industry, and it does entrepreneurs and VCs a disservice to treat the industry in bulk. There definitely are “VC” firms that are better aligned with early stage web companies, but they aren’t (currently) the household names in the business.

I have a related blog post up for anyone who wants to drill into this: http://crashdev.blogspot.com/2010/01/vc-is-dead-long-live-vc.html