Entrepreneur Vivek Wadhwa accuses VC report of being ‘voodoo economics’
RESEARCH TRIANGLE PARK, N.C. – “Voodoo economics” is back, but this time the criticism comes from an entrepreneur and it is aimed at venture capitalists.
Vivek Wadhwa, a serial tech entrepreneur, is hardly a fan of venture capitalists after his experiences in starting and growing Relativity Technologies – an experience that ended up nearly killing him with a heart attack.
Now an executive in residence at Duke University as well as working with UC-Berkeley and Harvard law School, he is even more outspoken about the vices of VCs.
In a post Sunday at TechCrunch, Wadhwa took aim at the National venture Capital Association and its recently published annual report that touts the role of VCs in growing new businesses. He calls out the VCs for ‘voodoo economics” claims.
“The point is that to boost the economy, we need to help the real sources of innovation and growth,” Wadhwa wrote in a note to friends and colleagues about his TechCrunch broadside. “These are the entrepreneurs who take the risk – not the middlemen VC’s and investment bankers who got themselves into trouble and now want bailouts and tax-breaks.“
Wadhwa obviously struck a nerve. His opinions have already triggered more than 150 responses.
Titled “What Have VCs Really Done for Innovation”, Wadhwa wrote:
“Back in 1986, when Bill Gates was still making sales calls, he pitched my group at First Boston on why we should bet the farm on Windows. Despite the risk involved, we gave his fledgling startup the deal. This wasn’t because of his financial backers (he didn’t even drop any names), but because we believed in his vision and nerdiness. In the same way, Google became a huge success long before the deep pocketed VC’s arrived to ride Larry and Sergey’s coattails. They simply had a great technology and winning strategy.
“So I’m miffed by the National Venture Capital Association’s (NVCA) claim that companies like Microsoft and Google “…would not exist today without the funding and guidance provided during their early stages by venture capitalists.” And I’m amused that the NVCA claims credit for creating 12 million jobs and generating $3 trillion in revenue (that’s only 21 percent of U.S. GDP). In the software industry (which includes Internet/Web 2.0), they stake claim to 81% of the all jobs created. Yes, 81%. Can they please give the entrepreneurs who risk their life savings, max out their credit cards and put their families in the back seat a little more credit? We’re not talking about divvying up the company’s stock here, just a pat on the back.”
For the full post, read here.
Get the latest news alerts: Follow LTW at Twitter.
Copyright 2013 WRAL Tech Wire. All rights reserved.
Log in or upgrade to view WRALTechWire Insider content
WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…
Please Log In to add a comment.
Best of TechWire Insider
- NC Biotech Center braces for worst as Senate slashes budget, too
- ArchiveSocial, a new Durham success story, brings home international award
- Durham's high-tech infrastructure, talent lure Virginia company
- Lenovo acknowledges layoffs in Morrisville as part of shift to 'PC Plus' strategy
- Raleigh-based PRA International eyes public offering
- Will lightning strike again for veteran entrepreneur Brian Handly at StepLeader?
- Raleigh app developer StepLeader lands $4.4M in first fund raiser
- IBM opens Linux center in China, says it will work with Red Hat
- Red-hot Raleigh startup WedPics hauls in $1.1M in funding
- New Triangle venture capital firm slowly emerging from shadows