Skip to content

The Dumbest VC

November 5, 2010

Venture Capital… there used to be a joke in the Bay that you could find a VC Firm to support your wild idea by just going to Menlo Park and shaking a tree.  One would fall out and hand you money.  For some firms, it’s not even that hard anymore.  And the results are pretty much the same, wild ideas result in no money for the investors.

The Obama administration made Solyndra, a solar-power manufacturing company, a symbol of its “green jobs” push in the Porkulus program. Barack Obama himself toured the factory, as did Barbara Boxer. Taxpayers ended up sinking $535 million into building Solyndra a new facility that promised to add jobs in the clean-energy sector. Instead, now that Solyndra has its new facility, it’s closing another older facility and will lay off dozens of employees and cancel the contracts for 150 more contract workers:

So first, I’m not necessarily mad at Solyndra.  The start-up environment is one where you find people willing to invest, and you then use that money wisely to grow over time.  I can’t say whether Solyndra needed the new facility, but if you can get efficiency out of largesse, then at least you’re trying.  Now, my gut would tell me that they could have perhaps improved their old factory for a lot less and kept the same amount of employees, but it might not have been able to meet the capacity they needed.

But honestly, why didn’t some ask me if that was how I wanted to spend my money?  I’d have probably voted no.  But I don’t get a vote. I’m just footing the bill when the government chooses to spend on sketchy return (and doesn’t ask for return, by the way).  If a VC came to me and offered to invest money in my wife’s business… say be asking her to build a new production facility and promise to hire jobs, but not make us sign anything?  Hey, free money.  Sure, we’ll buy the equipment and find the building.  People?  Well, we really don’t have the business to hire more people.  Thanks, VC!

Even the guys in trees in Menlo are chuckling.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: