VC Aileen Lee emphasizes how a wider investor Exodus worsens unhappiness for unicorn companies

In the episode this week Download Strictlyvc Podcast, VC VC Aileen Lee, was directly with a significant consequence of the recent Boom and Bustu series: many companies got stuck within the abyss, not only fought for recovery of position after collecting an excessive amount of money on unbalanced valuations; They also lost the masters who once supported them.

Lee talked about how the partners of the limited partners hesitate to criticize the powerful managers of the fund, fearing that they might be cut off from investing in these companies again. But she imagined one thing they might say if they might speak freely:

“Everyone wants to get to the X brand fund, so they never criticize them (for fear of repercussions). . They probably speak about us behind our backs (laughs) … But what they would say is (that) all people who were employed in these companies in the Venture in the Era of ZIRP. . . They made several shit investments, “and now they’re elbows – except that it is just too late, Lee noticed. “All money (LPS) was basically simply thrown on drainage, because people from work of the undertaking did not remain long enough to see if the companies were successful.”

Lee isn’t the fault of those newer investors. “Only a lot of people have not been trained and did not receive any mentoring or internship, as well as many investments and. As a result, there are many orphaned companies. ”

But there’s another excuse why the startups are left on their very own devices “and I think it is crazy,” said Lee; In many cases, the companies were orphaned by the senior general partner “who ran the investment – which is still there (in the company), but simply stopped appearing at the meetings of the board.”

This has been happening for some companies for years. Nobody had major care throughout the financing era with Covid, and the corner cut never stopped relating to the identical investments. But this can be a key reason why the growing variety of companies tries to search out external assist in exit strategies and why LPS can be justified in expressing greater frustration.

As one other a few years of VC, Jason Lemkin, told this editor at the tip of 2022, when VC for the primary time ceased to seem at startup meetings that lose their shoot: “(s) should not be controls and balances? Millions and millions are invested by pension funds, universities, widows and orphans, and when you do not perform any diligence on the way, and you do not perform constant diligence at a meeting of the board, in a sense you discourage your trust duties against LPS, right? “