VCs should want to hold early-stage companies more accountable

There's a agelong history of choosing imaginable profits complete doing nan correct thing

If nan last twelvemonth has taught america anything, it’s that VCs fto their portfolio companies get distant pinch a lot.

No balance sheet? No problem; here’s a $32 cardinal valuation. No proven product-market fresh and your past task costs investors billions? Here’s a check worthy much than each Black founders raised successful 2021’s different record-breaking year. Cut a cheque for Elon Musk’s Twitter acquisition when he’s ne'er built successful that abstraction earlier and has a estimation for treating labor poorly, why not?

One tin only ideate nan messes we don’t perceive about.

Venture superior has a history of choosing imaginable profits complete doing nan correct thing, but successful galore cases, this intentional deficiency of accountability complete a portfolio company’s sore spots aliases issues ends up biting nan investor down nan line. It could besides extremity up hurting their LPs erstwhile things inevitably commencement to crack.

Usually we — as in, those who aren’t moving at, aliases investing in, said startups — don’t perceive astir these instances until it’s acold excessively late. A startup is worthy complete $1 billion, and only past do we study astir nan labor and stakeholders being affected by nan company’s missteps aliases activity shortcomings.

But it doesn’t person to beryllium this way.