Page 199 - Free the Idea Monkey

DEFENDING THE VENTURE CAPITALISTS

Nearly every entrepreneur who took venture capital money

during the past 40 years will tell you pretty much the same story:

the VCs exerted far more control than

expected, budgets were slashed, “What was
friends were fired from the pay- working for the
roll, and “they never really got company that bought
our vision.” Given those sto- my company like? It
ries, you’d think that venture was like some other guy
capitalists are the last thing the was sleeping with my
world needs to make innovation wife — I had to watch and
happen. However, they may be he wasn’t that good.”

—wishes to remain
anonymous

exactly what’s needed. (go figure)

Sure, it used to be that VCs were

about cutting costs and relentlessly narrowing the

company’s vision to create a firm that was easy to sell or take public.

But today, the smartest VCs are changing their focus. They are look-

ing for three things:

Disrupters, aka companies that are reinventing the rules:

Companies that can produce a result through a product or a service

that is dramatically more effective or cheaper than what their peers

are doing. We aren’t talking about incremental improvements here.

We are talking about firms like PayPal, who earlier in this decade

helped change the way we buy things. Or Lending Tree, which took

the control away from banks when it came to making mortgage loans.

184 T H E D A V I D S T R A T E G I E S