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this article makes the good point that the mba types who are running vc funds are fundamentally ill-suited for identifying and investing in technology startups.
by smalter 19y ago
this article makes the good point that the mba types who are running vc funds are fundamentally ill-suited for identifying and investing in technology startups. paul graham identified this as true for managers of startups as well; and this is a defining feature of yc--investing in technology people vs. investing in mba types who hire programmers. of course, the logical extension is that the people doing the investing themselves should be technology people because they alone can recognize value in the technology sector. whatever value mba vc types did bring to the table, understanding of business management and such, is becoming less relevant with smaller startups and less money to be allocated.
- muerdeme 19y agowhatever value mba vc types did bring to the table, understanding of business management and such, is becoming less relevant with smaller startups and less money to be allocated. I completely agree. The answer isn't to convince VCs to invest in companies they aren't suited to be messing around with. Something new needs to happen. PG pointing it out to outsiders should help the free market in the right direction...
- aswanson 19y agowhatever value mba vc types did bring to the table I still don't understand how they are valued at all. They don't invent anything, don't know how to help people who do, and are often bad at caretaking what has been built. This is not meant as a swipe at them, but I honestly do not understand why they are highly valued.
- pius 19y agoThey're highly valued?
- aswanson 19y agoJust look at the CVs and salary data (if available) at any VC firm, or, outside of the startup world, grep for median MBA compensation and compare it to any tech field median salary.
- myoung8 19y agoBecause, at least according to a handful of VCs at DFJ, 70% of the work they do involves interacting with and convincing other people (usually people who can help their portfolio companies in some way, shape, or form). In general, MBAs are better at this than those with technical training. Further, a VC doesn't have to understand the intimate technical details of an opportunity to recognize that it is a valuable opportunity. I'm not saying this makes for a good relationship with your VC, but that's why the equilibrium set of employees tends towards MBAs instead of PhDs. However, I think you'll find that many VCs in the top-tier did engineering at undergrad, then got an MBA.