Venture Capitalists as Grizzly Bears

I really did read all of Bill Burnham's Beat (Deal Flow is Dead, Long Live Thesis Driven Investing). But what caught my attention was the comparison of VCs to Grizzlies.

In the analogy, the deals are represented by the salmon swimming in abundance by the bears (the VCs).

Now, as most of you know, the salmon swim upstream, spawn, and die. You're already way ahead of me...but let's run this analogy completely up on the beach until the birds pick it clean.

Burnham doesn't specifically say that Thesis Driven Investing VCs are still Grizzlies, but he implies that they are out there "turning over rocks".

I'm thinking out loud...How can smarter Grizzlies be good for the salmon? I see how being a smarter bear is good for the bear, so I certainly want to be a Thesis Grizzlie if I was a bear.

For the salmon, however, it doesn't matter if you're a Thesis or a Deal Flow Grizzlie. You're still eaten.

As Burnham points out, the VC bear population has expanded quite nicely.

Conclusion: This is going to be a bad time to be a salmon until somebody does something about all those bears.



Tags: venture capital