Tonight I attended a conference on Venture Capital and the recession. The panel was comprised of VCs and CEOs who are funded by VCs. The audience was mostly entrepreneurs who hope to someday be able to attract VC funding.This is not a new subject for me. I first got involved in the VC – Startup world back in 95 when I was involved with my first startup. Almost 15 years later and I am amazed that the conversation has not changed much. The entrepreneurs need the money and the VCs holding the keys to the kingdom.
As I listened to the entrepreneurs ask their questions and the panel gave their answers I was reminded of that old 1955 Ernie Ford song Sixteen Tons and the lyrics – Saint Peter don’t you call me cause I can’t go, I owe my soul to the company store. How many of these entrepreneurs are selling their soul, worse yet, the soul of their child – the company, for the “need for money.”
I couldn’t help but ponder what would happen if the dynamics were reversed. Let’s face it the VC needs the entrepreneur as much, if not more that the entrepreneur needs the VC’s money. A VC cannot make any return if he doesn’t invest the money in some enterprise but an entrepreneur can make a go of their business without the VC investment. It may take longer to follow a bootstrap strategy but it is clearly done all the time. Imagine a startup world where the VCs come seeking the entrepreneur to allow them to invest their money.
Sound silly? Not really. Ask any CEO of a successful company how many letters they get asking if they want to sell their company. Even I have begun to receive such requests and I have hardly gotten my company off the ground (as least by my standards).Imagine how the world might be better serve d if the focus was put back on what the soulful purpose of the startup is meant to be and that it was guided to fulfill this purpose and serve the marketplace in ways it was intended to.
How did we get the system turned around? How did we allow the soul of the company become corrupted to serve the purpose to provide a return to money managers?
Perhaps it is time for entrepreneurs to take back their companies and become true to the reason they started the firm in the first place –to serve a need in the market in a way only their unique contribution can make.
Norman Wolfe | President/CEO | Quantum Leaders, Inc