How Their Own Rules Were Changed by the Venture Capital Firms
Perhaps the most important change in the traditional rules of the venture firms was the rush to take companies to IPOs. This caused VCs to alter their criteria for investment from building a sustainable business to finding a model that could be floated to the public quickly. When Net mania hit, they abandoned that approach and began rushing companies onto the public market with the ink barely dry on the business plans.
Why was this? In part it was because older venture firms had inducted many younger partners who may not have known any better and because there were many new venture firms that had no experience of the past to guide them. Among these new venture firms were many established ...
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