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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