Your article on venture capital encompassed many of the negatives and pitfalls related to the venture investment field. However, it also pointed out a number of positives that, unfortunately, took a back seat in the context of your article.

As the chief executive officer of a venture capital-sponsored firm, I suggest that you could restructure your article to give your readership positive advice on how a smart company should say yes to venture capital.

A smart company should:

* realize that an insufficiently capitalized organization will die -- good and bad alike;

* structure a credible business plan and a reputable management team that can effectively compete for the time of the General Georges Doriots of the venture capital world -- people who do believe in building men and companies and who are realistically oriented away from the "quick hit;"

*get past the layer of MBA subordinates and deal with the reputable venture capital general partners, of which there are probably several;

* structure its board of directors to include those venture capital general partners who do possess the proper seasoning and experience, or who have built companies themselves;

* identify its corporate visions as a part of its business plan, and promote common goals for the company and the venture groups to reduce potential conflict, rather than expending energy wrestling for control.

My firm has been venture capital-sponsored since 1977. It has gone through four equity financings totaling $10 million, and several modifications in its originally conceived business plan. However, our experience with our knowledgeable investors has been out-and-out positive for exactly that reason--our investors are knowledgeable.

General Doriot is not dead. His progeny are alive and well for the smart company to utilize to build its visions into a profitable and successful business organi zation. The not-so-smart company will come to the market with a second-seeded plan, improperly trained staff, and insufficient financing to surely kill what could be, with proper guidance and funding, a successful venture.

Published on: Nov 1, 1984