IP: re: IEEE SPectrum Opinion: Speakout: An Engineer's view of VCs

[David Farber <dave () farber net>]

> Date: Sat, 1 Sep 2001 14:47:10 -0700 (PDT)
> From: Marc Hedlund <marc () precipice org>
>
> Dave,
>
> [Feel free to forward to IP if you want.]
>
> > > An Engineer's View of Venture Capitalists
> > > http://www.spectrum.ieee.org/WEBONLY/resource/sep01/speak.html
>
> The remedies this article proposes seem to me not to change anything.
> Angel investing, while obviously excellent for getting a company started,
> is simply a step on the road to venture investment (as the article says
> itself).  A public VC fund would be obligated to maximize return for its
> investors, so it would *have* to use all the same tactics VC's use today
> or face shareholder lawsuits.  This is like saying, the buyers of our
> product aren't agreeing to prices we like, so let's create fake buyers
> that will pay more.  This makes no sense economically, and does nothing to
> change the long-term efficiency of the market.
>
> It seems to me that there are better ways to change the power balance than
> trying to match the VC's dollar for dollar, which is not realistic.  The
> most obvious possibility to me would be to try to create a engineer's
> information network that allows engineers to share deal information in the
> same way VC's do (a process the article describes under the heading "VCs
> collude").  If engineers want to effect change, they should instead try to
> create a more efficient marketplace for engineering effort by ameliorating
> the imbalance of information sharing.  A VentureWire for nerds.
>
> Marc Hedlund
> e: marc at precipice dot org



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