I have just been reminded of the days when I was a fledgling entrepreneur going door to door on Sand Hill Road seeking funding. I remember how VCs would make me wait for hours and try to look smart in front of their partners by finding petty faults in my business plan. They were the kings and kingmakers and treated entrepreneurs as beggars. Fortunately, the cost of starting software companies soon fell to the point that crowdfunding and angel capital provided a better alternative. This shift in the power balance forced VCs to suck up to entrepreneurs instead.
However, this shift was only in the software space. In capital-intensive fields such as biotechnology, little has changed. Moreover, because of the spectacular failure of Theranos, VCs are more risk-averse than ever–literally traumatized.
