Venture capital is failing the journalist test
You aren't the story!
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💡 Startup of the Day: Chainguard. I recently interviewed the CEO of SMB-focused cybersecurity company Huntress for TWiST (out in a week or so) about his company’s market. The vibe? It’s a great time to sell cyber protection as businesses become more cloud-based, digital, and software-based. CrowdStrike’s mess be damned.
That in mind, Chainguard’s recent $140 million Series C caught my eye. The company — now a unicorn — has seen 175% revenue growth in the last year, per GeekWire. Frankly, my knowledge of software supply chain security is modest, which makes Chainguard’s growth all the more enticing — a single cybersecurity niche can generate that level of revenue expansion? Bullish.
Venture capital is failing the journalist test
There’s a maxim in journalism that the reporter should not be the story. The corollary of that point is that something has usually gone wrong if a reporter is part of the story. There are exceptions to the norm, like when a hostile foreign power kidnaps a reporter. But the rule generally holds and is a good one.
Currently, venture capital is failing the journalist test.
Instead of acting as capital allocators — putting pension fund and family office wealth to work in upstart technology companies and trying to smooth the path for backed startups to eventually go public — VCs are currently a leading story in technology land.
TechCrunch’s Julie Bort has a good overview of the drama here. The gist is that as some venture capitalists have become strident supporters of former President Donald Trump, intra-venture squabbling has become inescapably loud.
There are several warring camps. One is the David Sacks pro-Trump contingent. Another is the pro-Parker Conrad camp, which views Sacks as a non-founder-friendly investor. And then there’s the Khosla cohort of anti-Trump investors, who are contra-Sacks in political as opposed to business terms.
Do you care? Apart from tracking the checks flowing to competing political parties from different subsets of the larger startup-venture industry, perhaps not. And that’s the point. No one wants to hear about the reporter covering a story. They should be, whenever possible, invisible, at least according to traditional norms.
Venture capitalists similarly should not be the story in Silicon Valley. Founders, early employees, technologists, brilliant marketers, and the other folks who turn ideas into big new companies should be. But here we are, watching VCs squabble and bicker, consuming column inches, founder focus, and marketing oxygen that could go to better use.
Is all the above worse than just a bad look? Yes. For founders, at least. Folks building upstart tech companies already face a cutthroat market to raise capital and massively powerful incumbent tech giants. Now they may have to worry if they take a check from Venture Firm A, will they be able to raise from Venture Firm B if the two firms’ leading partners are on opposite sides of the political — or merely drama — spectrum?
Watch any number of venture capital interviews, and you will hear the money folks extol founder focus. I suspect that it’s a bit harder to focus when the folks on your cap table are throwing food at one another instead of trying to help you land that next big customer, hire, partner, or channel.