Venture Capitalists frequently "throw" their input, feedback, value-add to the CEOs of their portfolio companies during board meetings. But really, how many of them are true operations executives? not many, in fact. And that is where many of the CEOs get frustrated, often jump ship. I've sat on so many board meetings where VCs keep asking the CEO to work with this or that "framework". Where in reality, these VCs have no clue. Not all, but a good many late jumpers in the industry.
After the 2000 bubble burst, many VCs sat idle on their boards not knowing what to do. Frequently rotating CEOs for the sake of it, throwing good money after bad in executive searches with big headhunters. LPs are starting to wise up and demand that VCs on fund management team bring with them an operations background.
I've heard so many LPs ask, "are these VCs capable of being CEO or CIO for one day?" Just like it happened in Private Equity where for many years it was the playground of ex-Investment Bankers. Now any self-respecting Private Equity firm boast a deep operations team of partners and general partners.
Time for Venture Capital to wise up if it doesn't want to have another series of weak fundraisisng seasons...2010 was a record low...
