Over the past few months, I’ve heard countless VCs utter the words ‘we need to own’ followed by some number. Often it is 20pcnt, but it is frequently 30pcnt. I heard someone tell me about a VC yesterday who said they needed to own 44pcnt. I was tempted to ask them to give me the number to four digits.
This behavior by VCs is not productive. I’ve said this before and I will say it again. We are putting our needs before the needs of our portfolio companies and the entrepreneurs who form them.
And this “need” is just greed. We don’t need to own any specific percentage. We just want to.
How much of Google did KP and Sequoia own? You can say ‘well that was Google’ but it wasn’t the greatest venture deal of the decade when they made their investment.
We took 10pcnt of a company a few years ago that has become our best investment. We own less than 10pcnt of it now. And we will make a ton of money on this investment, probably more than any other investment in our fund. And we own less of it than any other investment in our portfolio.
The VC business is not about grabbing the largest slice of the pie. It is about getting involved with very big pies. If you let your need for the biggest piece keep you out of the pie eating contest, you will lose eventually.
VCs can do what they want and they are doing it. But please don’t use the words ‘we need to own’ around me. I am calling bullshit on it and will do it to your face.
