A Short Leash

Silicon Valley's rich environment of universities, serial entrepreneurs, and venture capitalists makes it a wellspring of technological innovation. But relationships among joint-risk stock companies and entrepreneurs are seldom love affairs, and company founders are often kept on a short leash. Horror stories abound of the predatory nature of "vulture capitalists," who neglect the interests of their startup clients in favor of delivering returns to investors.

Venture capitalists often contribute their experience and expertise to the companies they finance. As part owners, many actively participate in the day-to-day management of the companies they invest in, contributing to strategic position, human resource policies, organizational ...

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