Should you be paranoid about your VCs?
There’s an interesting story in the Boston Globe yesterday about the founder of Silicon Valley online travel start-up SideStep, and how he had several meetings with an East Coast venture firm that ended up funding a competitor.
The Boston venture capital firm, General Catalyst, apparently never disclosed to SideStep founder and CEO Brian Barth that it was considering investing in Kayak, a move they announced a month after their last conversation with Barth (and so, most likely knew about the deal at the time of their conversations with Barth, because it usually takes at least a month to get from first meeting to deal-announcement stage).
We found the response from the VCs in this story noteworthy. Nowhere did they come close to saying that, yes, perhaps they should have disclosed the fact they were looking at Kayak. True, there’s nothing illegal in not being aboveboard in this case. But your reputation will spread, and for VCs, that’s everything these days. Still, as Mike at Techdirt points out, that’s part of the game, and start-up entrepreneurs need to realize that.
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About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
