The traditional power of venture capitalists to influence founders has been eroded by an “ever-rebellious youth culture,” said Mallaby, who tells of Facebook’s Mark Zuckerberg deigning late to meet the venerable firm Sequoia dressed in a T-shirt and pajama bottoms. But Mallaby also points to a structural change. He says the balance of power has tipped in favor of the most sought-after entrepreneurs because they can now choose from screaming suitors: There is more money than ever before looking for the next big thing.
The book contains many detailed details about deals being struck, phone calls being tossed around, meetings being organized and postponed. Banal bits of conversations are told, even if they seem to serve only as narrative junk. (“What are you doing tomorrow morning?” “I’m not doing anything.” “Great, shall we meet for breakfast?”) Some of Mallaby’s metaphors make no sense; he writes that one VC, when he heard of a happy surprise, “digested this bolt from heaven.” Another VC, also triumphant, “allowed himself only one discreet celebration, like a man pumping his fist and shouting a victory cry, but in silence.” So this VC screamed but didn’t scream – and since he’s just “like” this tormented statue, didn’t he pump his fist too?
That’s the stuff that fills up this overcrowded book, which never quite satisfies the case trying to make it laborious. Mallaby’s main argument is that disruption of venture capital funds usually benefits. Innovation breeds more innovation and frees us from a stagnant status quo.
Mallaby has obviously done a lot of research, and it’s not as if he’s unaware of the ‘alleged shortcomings’ of venture capital; he simply decides that they are dwarfed by the ‘industry attractions’. One passing sentence states that all the money poured into Uber to “blitzscale” and decimate the competition may have forced existing taxi operators to “compete on a distorted playing field”, but those “seated taxi- operators,” says Mallaby, were. still pleasant with municipal supervisors. There is no mention of how utterly disastrous the dominance of apps like Uber has been for such ‘established’ (a dirty word among disruptors) – the financial ruin, the suicides; there is only the cold (and questionable) conclusion that “cheap venture dollars served to balance that unfair advantage.”
Of the founders’ spectacular outbursts at Uber and WeWork, Mallaby’s apology is a sight to behold. Their “responsible” VC supporters may have kept quiet and recorded any qualms “politely” and privately until embarrassing information became too public to ignore, but the real blame, he says, doesn’t lie with those adults in the room, but at “negligent, late-stage investors” – even though those same venture capitalists were happy that their wayward founders took the money from those “negligent” investors.
There is only one criticism of venture capital that Mallaby believes is justified: the need for the industry to diversify beyond a “monoculture” that is “too white, too masculine, too Harvard/Stanford”. This is an honest review, but at this point, it doesn’t really speak the truth against power. Venture capitalists love to talk about daring, but you can imagine they’ll appreciate the tone of reverent restraint in this financier-friendly book; it’s much better to get a well-known call for more diversity than something that can question their bottom line.
