News

How Venture Boards Influence the Success or Failure of Technology Companies After the Term Sheet

Most of the literature we read about entrepreneurial ventures and business start-ups comes from the perspective of the company founder and CEO. Books and articles chronicling the early days of companies from Apple to Amazon are presented as the sagas of visionaries who forge a dream, idea, or technology into business reality despite waves of setbacks. In these tales, the heroic CEO brings together talented individuals to form a management team that works day and night to craft an idea into a viable product and makes the business work.

For venture capitalists and other directors involved in these start-ups, such accounts often have a distinctly Rashomon-like feel; the facts are familiar and the names are the same, but just as in Rashomon, Kurosawa’s classic film exploring different points of view, the interpretation can differ markedly.

This paper discusses the development of a start-up through the lens of the venture capitalist ("VC") and the board of directors, rather than the traditional lens of the CEO and management team. The popular casting of VCs in minor (or even "un-supporting" roles) overlooks the essential contribution active VCs can and do make in emerging companies. VCs’ wide experiences, social network, mentoring, and other resources are of greater value than their capital in nurturing new ventures. We believe that the personal relationships and how the key people work together-the process-is the key to enterprise success. Consequently, we feel that the inability or unwillingness of a CEO to accept and utilize the value VC board members bring to a new venture can contribute to the downfall of an otherwise viable company.

A White Paper by

Dennis T. Jaffe, Ph. D.,
Saybrook Graduate School

Pascal N. Levensohn,
Levensohn Venture Partners

Part 1: http://vcexperts.com/vce/news/buzz/archive_view.asp?id=290&referrer=moreover

News Catrgory Sponspor:


Dorsey & Whitney - An International business law firm, applying a business perspective to clients' needs in Missoula, Montana and beyond.

Leave a Comment

You must be logged in to post a comment.