There’s a long history of choosing potential profits over doing the right thing
If the last year has taught us anything, it’s that VCs let their portfolio companies get away with a lot.
No balance sheet? No problem; here’s a $32 billion valuation. No proven product-market fit and your last venture cost investors billions? Here’s a check worth more than all Black founders raised in 2021’s otherwise record-breaking year. Cut a check for Elon Musk’s Twitter acquisition when he’s never built in that space before and has a reputation for treating employees poorly, why not?
One can only imagine the messes we don’t hear about.
Venture capital has a history of choosing potential profits over doing the right thing, but in many cases, this intentional lack of accountability over a portfolio company’s sore spots or issues ends up biting the investor down the line. It could also end up hurting their LPs when things inevitably start to crack.
Usually we — as in, those who aren’t working at, or investing in, said startups — don’t hear about these instances until it’s far too late. A startup is worth over $1 billion, and only then do we learn about the employees and stakeholders being affected by the company’s missteps or leadership shortcomings.
But it doesn’t have to be this way.
