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VC try to filter out such founders - but it happens and it is the reason of why VCs want quick outcomes and avoid the middle ground of slow growth profitable co
by zby 8y ago
VC try to filter out such founders - but it happens and it is the reason of why VCs want quick outcomes and avoid the middle ground of slow growth profitable companies. They want their companies either go down quickly or grow up enormously also quickly, because the more time it takes the easier it is for the founders to make good life out of it without giving back anything to the investors.
This is the principal-agent problem and VCs have a particular way of working around it, traditional private equity has another way and banks have yet different one (and crowdfunding does not https://medium.com/@zby/the-problem-with-crowdfunding-81b53f963387 https://medium.com/@zby/the-problem-with-crowdfunding-81b53f...).
- ngngngng 8y agoThanks for this, now I know exactly what I was trying to ask and the answer. I wonder if more companies moving away from VC opens the door for more founders to take advantage of the principal-agent issue.