Comments on: The “broken” VC model http://jeffnolan.com/wp/2006/01/29/the-broken-vc-model/ Jeff Nolan's take on investment, innovation, entrepreneurship and the technology industry Mon, 06 Feb 2012 06:44:37 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: John Kranick http://jeffnolan.com/wp/2006/01/29/the-broken-vc-model/comment-page-1/#comment-197715 John Kranick Sun, 02 Dec 2007 17:18:23 +0000 http://jeffnolan.com/wp/2006/01/29/the-broken-vc-model/#comment-197715 Hi, Just wanted to let you know I've put up a Currency Trading facts site. Lots of useful articles and information as well as constantly updated rss feeds to keep you abreast of what's going on. Post / link and let me know what you would like to see. http://forex.greatfactsabout.com/ John Hi,

Just wanted to let you know I’ve put up a Currency Trading facts site. Lots of useful articles and information as well as constantly updated rss feeds to keep you abreast of what’s going on. Post / link and let me know what you would like to see.
http://forex.greatfactsabout.com/

John

]]> By: forex trade http://jeffnolan.com/wp/2006/01/29/the-broken-vc-model/comment-page-1/#comment-732 forex trade Fri, 24 Mar 2006 23:27:10 +0000 http://jeffnolan.com/wp/2006/01/29/the-broken-vc-model/#comment-732 Hello to ALL! I'm Sue Jet Everson, I found your site on Yahoo! Do you know there is a cool WP plug in that lets Folks subscribe to rss feeds by email! Hello to ALL! I’m Sue Jet Everson, I found your site on Yahoo! Do you know there is a cool WP plug in that lets Folks subscribe to rss feeds by email!

]]> By: Eric Olson http://jeffnolan.com/wp/2006/01/29/the-broken-vc-model/comment-page-1/#comment-7 Eric Olson Tue, 31 Jan 2006 23:08:29 +0000 http://jeffnolan.com/wp/2006/01/29/the-broken-vc-model/#comment-7 I don't think people are saying that the VC model doesn't work. I think what most of the conversation is about, or should be about, is how to better align risk between entrepreneurs and VCs. Right now, the risk is very lopsided since the entrepreneur has only one company and the VC has many companies. This causes (in some cases) an imbalance of wants/expectations when, for example, there is an offer on the table to buy XYZ company for $30mm. The VCs may want to hold for $100mm (which may never come but has a good likelihood of working out) and the entrepreneurs are thinking that they might hit $100mm but the $30mm is already on the table and will set them and their children up for life. The usual 10 year life of VC funds is also an issue because it forces some companies to grow too quickly. However, I won't go on any further about this as I would like to save it for my upcoming blog post. I don’t think people are saying that the VC model doesn’t work. I think what most of the conversation is about, or should be about, is how to better align risk between entrepreneurs and VCs. Right now, the risk is very lopsided since the entrepreneur has only one company and the VC has many companies. This causes (in some cases) an imbalance of wants/expectations when, for example, there is an offer on the table to buy XYZ company for $30mm. The VCs may want to hold for $100mm (which may never come but has a good likelihood of working out) and the entrepreneurs are thinking that they might hit $100mm but the $30mm is already on the table and will set them and their children up for life.

The usual 10 year life of VC funds is also an issue because it forces some companies to grow too quickly. However, I won’t go on any further about this as I would like to save it for my upcoming blog post.

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