Last week was another tough week for online lending platform Lending Club. The company announced that their former CEO and founder had taken out loans on behalf of him and his family several years ago.

These loans were allegedly taken out a few months before a capital raise, to show investors a boost in loan volumes.

I believe this story symbolizes the conflicts that entrepreneurs face when they try to build a lending business through the venture capital model.

Successful lending businesses are built slowly and steadily with a keen eye towards managing risk. And if you're in a rush, you are more than likely to make a mistake that could cost you dearly in the future.

The problem is that venture capitalists aren't the patient type. They like to build and grow quickly. Their whole premise is on the "next round" at a higher valuation than the previous one. A "down round" is bad news for an entrepreneur who has chosen this path. There are typically all kinds of consequences, and they have to keep their money on the treadmill they are riding.

I don't condone what Mr. Laplanche allegedly did. The theory is that he wanted to inflate his companies results to help keep his valuations up, his board happy, and the next round coming in. And every little bit helps, so he took out some loans.

However, in some ways, the entire Venture Capital model is to blame for what he did as well. The entrepreneur is under incredible pressure to perform under what many respects are artificial metrics, which don't speak to the life of the company. Success is driven by the ability to raise more money quickly at higher valuations. Profitability and risk management don't matter.

And while Mr. Laplanche is out of a job, many of the venture capitalists who backed him have paid a price. They celebrated the company having a public valuation is about $8 billion just about 20 months ago. It's current market cap is currently $1.59 billion, just a fraction of what many venture capitalists bought into the company at pre-IPO.

And Lending Club is not alone. OnDeck Capital, another venture capital backed company that went public right around the same time has seen their market cap plummet also.

The moral of the story. Build lending businesses slowly and carefully. Sometimes the tortoise will win the race.