Information Arbitrage – The Entrepreneur/VC Dynamic

via Roger: 

Both parties need to recognize that no matter what happens, the utility functions of the VC and the entrepreneur simply do not match in an early-stage exit scenario. They just don’t. And this has to be ok. Because if it’s not, the chance for establishing healthy long-term relationships between VCs and entrepreneurs goes way, way down. Investing in an early-stage company isn’t merely investing in a product, technology or service, it is investing in a person (or people) and a relationship. Building companies is necessarily a people business. And approaching these relationships from the perspective that “life is a marathon; not a sprint” is, in my opinion, essential to building a healthy venture firm for the long haul, and will ultimately optimize long-term returns as well.

Excellent post & I couldn’t agree more. This happened recently to us at 5min. The investors thought the price was too low but ultimately the founders wanted to sell. So we sold and I’m thrilled for the founders. They treated us great and built an sweet company along the way. What else can you ask for. 

Information Arbitrage – The Entrepreneur/VC Dynamic