Venture capitalists are not, and should not be, responsible for educating entrepreneurs. Their responsibility is to provide a superior return on capital. True, outstanding results have created real growth pains and the probability of a shakeout. The real issue is that most firsttime entrepreneurs don't know what they need or how to get it.

As a risk partner to entrepreneurs starting significant companies and helping them to build their strategies, business plans, management teams and to communicate with outside required resources, have talked to over 1,000 entrepreneurs who have started companies since 1980, including some 100 who failed to raise funds from venture capitalists. Few entrepreneurs fully understand that it is as important to package and target their venture to the right funding sources as it is to package and target the company's products to the right consumers.

There are inevitably one or two individuals in the venture community who would be outstanding partners for any specific venture. Their vulnerability is that they have neither the time, interest, nor ability to appropriately research the funding community (or godfathers) to identify the right partner and to package their company to obtain that assistance.


When we publised "Why Smart Companies Are Saying No to Venture Capital" (August), we anticipated that the article would generate much response fom both entrepreneurs and venture capitalists. The response, as reflected in the letters that follow, has shed some additional light on a very important subject. We trust that this is not the end of the discussion about the role of venture capital in building companies, and we encourage other readers to inform us of their experiences.