“Welcome to the dark side.” That was the standard line when people found out I was raising Homebrew, our new seed fund. It came from entrepreneurs or other investors, always said with a chuckle, like it was an innocent throwaway. Venture as the “dark side” of entrepreneurship is a really old joke. I have no idea where it originated
but it’s so indoctrinated that folks like Mark Suster, an operator turned VC I really respect, includes it in his blog bio [update May 2014: removed as part of redesign].
My response? I’d just kind of look at them and say “Boy, you must know some shitty VCs if that’s what you think.” Yeah I know, I’m a major buzzkill.
Calling venture the “dark side” is bullshit but not because I’ve been a VC for all of three months and I’ve got thin skin. Rather I think this in-joke actually encourages bad investor behavior. Follow me on this one.
One of my favorite academics Robert Cialdini wrote a book called Influence which details how you can prime someone’s sense of self, and then they’ll try to make sure their actions match the construct you’ve helped them create. For example, if you ask someone “are you a good person” and they say “yes,” they’re more likely to contribute to a charity if your follow-up question is “do you want to donate? Good people give money to charities.”
So here’s my theory. When we sit around joking that venture capital is the dark side, we’re subtly making it permissible for an investor to be a jerk because we’re creating a popular stereotype and excusing the behavior which lives up to it.
Reminds me of the parable involving a frog and scorpion. Scorpion needs ride across a stream. Asks a frog. Frog says “but you’ll sting me.” Scorpion says “no because if I sting you, we’ll both die. Why would i do that?” Frog thinks about it and agrees. Scorpion stings frog. Frog wails “why’d you sting me, now we’ll both die!” Scorpion shrugs and replies “i’m a scorpion. it’s in my nature.”
Perpetuating the notion that venture = dark side allows a VC to shrug and say “it’s in my nature.”
Homebrew. We’re not scorpions.