Idea · carried by 1 source
Venture Capital Has Changed
Moritz's candid assessment that the venture business of the 1980s–90s is fundamentally different from today's — and that he might not flourish in the modern version. The changes include the loss of information asymmetry, the proliferation of competitors, and the erosion of personal relationships.
Where it comes from
Michael Moritz makes this admission directly to Patrick O'Shaughnessy, acknowledging that his success was partly a product of a specific era. He identifies three key factors that made the old venture business easier (highlights/moritz-memories-sequoia-steve-jobs). > “I don't know that I would flourish in today's venture business. It's for a whole variety of reasons.” (lines 58:52–58:57)
How it works
- Factor 1 — Information asymmetry: Pre-internet, unless you were close to things, you didn't know what was happening. Today, everyone has access to the same information.
- Factor 2 — Proliferation of competitors: In the 80s, venture firms were tiny. Today, there are individuals, small firms, and “huge mutual funds pouring money into it.”
- Factor 3 — Erosion of relationships: “30 or 40 years ago, it was possible if you were an individual to form a relationship, a real relationship, close relationship with the people that you were getting into business with. That doesn't exist today.”
- New intermediaries: “There are just too many intermediaries in between” the investor and the founder.
The venture business rewards adaptability, but each era has its own advantages. The old advantages (geography, information access, personal relationships) have been replaced by new ones (speed, network effects, brand). Acknowledging what made you successful — and what might not transfer — is a form of intellectual honesty that most investors lack.