Next Things First

Surplus Weight and Cargo by charlottegee
October 21, 2008, 4:10 pm
Filed under: economy, venture capital | Tags: ,

Over at The Atlantic, James Fallows has a post about the “tension between funders and entrepreneurs” in tough economic times titled “Sobering news dept: The Hobbesian world of startups.”

In his post, Fallows references Lawrence Wilkinson, who related that “many of VCs and other funders are now saying: bad times mean your company isn’t growing as fast as we hoped. So, we will take more of ‘your’ share.”

Wilkinson continues:

Some of these entrepreneurs have no choice; they need cash, so they are holding their noses and swallowing the deals.  Others are finding alternative ways to get by and to grow.  But none of them will, I suspect, ever see their investors the same way again.  None of them will ever again hear the representations of these members of the incumbent financing class with the same degree of trust (which is, I believe, a real shame for the private equity folks I know who are *not* behaving greedily, but who may be tarred by this brush).

Interesting reading, viewpoints and words of warning (?) all around.

Posted by CharlotteGee


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