VC history seen with rose-colored glasses

SAN JOSE, Calif. – Thanks to Eastwick PR for inviting me to a private screening of the new documentary "Something Ventured." I highly recommend it as an important piece of the history of the electronics industry--seen through somewhat rose-colored glasses.

The film tells the humorous and very human stories of a handful of veteran Silicon Valley venture capitalists, but it underplays the shadow side of this world that's also well known here in Silicon Valley. It's wonderfully entertaining and informative, but it doesn't really open up this sector of our industry to as much critical analysis as it deserves.

Missing from the film is a hard look at Silicon Valley's over-work ethic that venture-funded startups drive. Startups are notorious for striking with employees a questionable bargain of the promise of possible riches in return for the certainty of dedicating four or five years of their lives to creating a new company.

Of course in nine out of ten cases the riches never materialize for anyone but perhaps the founders. In the majority of cases even the founders may not reap what they could have had with top jobs at established companies.

There's a reason that people joke VC stands for vulture capitalists. It's the same reason some entrepreneurs do back flips for financing rather than take VC money. The cash gets doled out in denominations of millions from guys that expect returns at least in tens of millions—and seeing that billion-dollar IPO or acquisition light flashing is what really makes them happy.

Face it, Sand Hill Road is to some extent the West Coast equivalent of Wall Street. Gordon Gekko's dictum that "Greed is Good" is the unspoken gospel. World-class universities such as Stanford are marinated in this philosophy with the VC offices that surround the campus.

As evidence, you will hear many times in the movie the big VCs talking about the importance of really, really big markets. That's what seems to put a glint in the eyes of veterans like Tom Perkins, interviewed for the movie on his beyond-massive custom yacht, the Maltese Falcon.

Don't get me wrong, VCs have done great things. They helped bring us the microprocessor, PC, Internet and even biotech by funding companies such as Intel, Apple, Cisco and Genentech.

The stories of these companies are at the heart of the film. As the movie points out people like Arthur Rock virtually invented the VC model and the concept of equity sharing among startup employees to finance these companies.

However, I would note there is often a huge gulf between the stakeholder status of a handful of founders, the inner circle around them and the rest of the jolt-cola drinking engineers who crank out more than their fair share of the work for often a relatively small slice of the stock. The movie didn't explore that infamous facet of startups either.

It doesn't surprise me that the film was a project started by a Silicon Valley VC and a PR person. Indeed, the National Venture Capital Association could buy rights to show the film as part of its marketing and lobbying efforts.

The film makes a show of exploring the underside of the VC world by telling the story of Sandy Lerner, the female co-founder of Cisco, ultimately booted out of the company. We are told the startup world is a tough place where entrepreneurs are often shoved out of the way as startups morph into growing corporations. The film makers imply Lerner might have been the next Steve Jobs were it not for the conservative gender values of the time.

It's an interesting story, and one I did not know. Indeed, one of the film's producers said they were the first to get an interview with Lerner on the subject of her firing, something that is clearly still painful for her many years after the fact.

Lerner's story while fascinating is a substitute for the real shadow side of the VC world. But that's a story another documentary will have tell, one not backed by a Silicon Valley VC.

Just one aside, Nolan Bushnell, the founder of Atari and one of the entrepreneurs profiled in the film, was on hand for a panel discussion after the movie. The man who helped launch the videogame industry was articulate and candid.

Asked about the road ahead, he noted venture capital has become a big business with lots of money and more formalized procedures these days. And there's no shortage of opportunities, he added.

"There are so many things that need to be done," Bushnell said. His recommendation to the new entrepreneur: "Study world problems and read science fiction."

VC history seen with rose-colored glasses