Speaking at an Early Stage Investing Conference in San Francisco last month, Geoffrey Moore espoused what may become the latest iteration of his famous Moore’s Law:
Venture Capitalists are mystified by cool and therefore are unable to invest successfully in Web 2.0 user-generated ventures.
It’s an interesting take, and I’m sure one that has been hotly debated at Mohr Davidow, the Silicon Valley VC firm at which Moore is a partner.
His take is that while some VCs have been able to invest profitably in such ventures it is more through luck than skill – their success as investors being akin to a blind squirrel finding an acorn.
Personally I think he is being a bit harsh on the venture guys. Sure there are some opinionated fools out there who have no clue, but the same can be said in any industry.
Just because they don’t teach cool in business school doesn’t mean some folks don’t have a nose for it. That said, it is worth doing that extra bit of due diligence on the venture firms you are thinking of spending time with to make sure they do ‘get it’.
[Photo courtesy of law_keven]