VCs should want to hold early-stage companies more accountable

If the last year has taught us anything, it’s that VCs let their portfolio companies get away with a lot.

No toptechtrends.com/2022/12/13/ah-so-sbfs-ftx-was-all-bs/”>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 toptechtrends.com/2022/08/16/how-a16zs-investment-into-adam-neumann-further-solidifies-the-concrete-ceiling/”>check worth more than all Black founders raised in 2021’s otherwise record-breaking year. Cut a check for Elon Musk’s Twitter toptechtrends.com/2022/10/27/elon-musk-bought-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.

toptechtrends.com/2023/02/21/early-stage-companies-accountably/”>VCs should want to hold early-stage companies more accountable by toptechtrends.com/author/rebecca-szkutak/”>Rebecca Szkutak originally published on toptechtrends.com/”>TechCrunch