Umair is Wrong

Everybody is wrong about something sometime.

And Umair has proven it with this post.

There are issues with the VC business for sure, but not the ones Umair talks about in this post.

Umair says about VCs:

they exist to sustain asymmetries (in information, resource, capital, etc)

That's wrong.  VCs may do a lot of dumb things (like everyone else), but we don't sustain anything.

We are in the business of investing in change.

Abnd have been since the industry was created.

And that hasn't changed.

And won't.

Comments

[Terry Steichen]

When the new innovators don't need truckloads of money, and the frontiers of user-generated-content (central to 2.0) have yet to be fully explored, let alone understood, how could the role of the VC not be challenged?

Umair is spot on, I think, in implying the obvious: most VC's don't have any more insight into these challenges than anyone else. Deep pre-2.0 background doesn't help much. And, since they can't invest in easily monitored gobs of money, they will have to dramatically change if they want to keep fully invested.

I don't see the counterargument at all.

[Daniel Nerezov]

All this talk about VC problems may well just be the product of market inactivity.

So as not to make nay predictions, I predict that the minute NASDAQ heats up and 20 year olds start floating 3 year old, venture backed startups - all of this "vc needs to change/ vc is dead" talk is gonna quickly disappear behind the roars of irrational exuberance.

Hey, it sucks that IPOs aren't happening, but there is no reason to make up things like the need for structural change in venture finance, to explain the fact that people aren't pushing their securities aggressively enough.

Everyone's just gotta keep the head down and market the hell out of anything with a board of directors.

[Hooman Radfar]

Fred, I agree that his post was a bit off. As I said in response to his post, "...the VC is not responsible for crafting value propositions that drive a business. The responsibility always falls to - you guessed it - the entrepreneur. The entrepreneur is not only responsible for building a product, but is also responsible for successfully transitioning technology from early adopters to the early majority. VCs simply provide capital, guidance, and - if you are lucky - connections."

[Carsten]

I don't know... What he writes is just so far off. He is seriously blaming VC for the fact that WSJ's, WaPo's, NYT's, and Economist's audiences have not been "...given the tools to connect and create"??

Doesn't make any sense whatsoever...