As Venture Funds Shrink, So Will Salaries
Or so a couple of investors predict, a prospect that no doubt thrills Limited Partners. Former venture capitalist Chris Dixon (he worked at Bessemer) argues that VCs raise bigger and bigger funds and push more and more money at startups -- for the same valuation, even when those startups don't need it -- so they can keep justifying their management fees, which Dixon points out can add up fast when you take 2 percent of a $500 million fund every year for 10 years. Dixon's latest project is Hunch, a startup he co-founded that teaches machines how to help people make decisions. It appears not to have taken venture capital. He calls for VCs to adopt performance-based compensation -- not just for their startups, but for themselves.
31 August 2009•2 mins read
