VC industry transformation

2 minutes estimated reading time

Technology venture capitalists (VC)  have been going through a lot of change since the bust, with disruptions to their model including start-ups needing less cash and Sarbanes Oxley suppressing the pipe line for early exits via an IPO. As innovation (ok web services) has become cheaper, it has attracted a wider range of entrepreneurs than bright (usually male) engineers with an idea. A new class of angel investor has filled some of the slots that venture capital firms would have traditionally filled.

Kleiner Perkins Caufield & Byers is one of the cornerstones of Silicon Valley VC culture. Eugene Kleiner (the Kleiner in KPCB) was one of the traitorous eight who where responsible for much of the modern semiconductor industry as we know it. The VC sector like technology start-ups have traditionally been very male orientated environments have had to change as society and the companies that they fund change. Junior partner Ellen Pao is one of the most prominent women at KPCB with an impressive track record and range of qualifications.

News sources in the US published that Ms Pao had filed a sexual discrimination suit against the company with a number of allegations against a senior colleague. This has had reverberations throughout the industry:

  • KPCB is a flag carrier for the VC industry
  • VC companies roles are being questioned as there has been a flight of capital from ‘hard’ investments in areas of innovation like biotechnology and the next generation semiconductor technologies – which impacts negatively on the global competitiveness of the US
  • Venture capitalism already feels out of touch with the kind of start-ups that it looks to fund, stereotyped as a preppy gentleman’s club
  • Female entrepreneurs are less likely to want to work with KPCB limiting the company’s access to some of the hottest start-ups

What’s the PR opportunity?

The opportunity for PR agencies is to sell reputation repositioning to venture capital companies:

  • Making them look relevant
  • Positioning them as open, inclusive organisations

Venture capital companies have historically under-invested in brand building and marketing in general, so there maybe an education process required.

Archived from posts that I wrote for PR Week. More finance related posts can be found here.