One of my favorite business school professors, Andre Perold, used to like to say that in every transaction in the financial markets, there are only two types of actors: wolves and sheep. As you might expect, the wolves have the edge in the encounter, due to superior market information or negotiating position. If you find yourself in a market transaction and don’t know for sure that you are the wolf, then, sadly, you are the sheep.
Venture capital investors are historically accustomed to being the wolf. During most periods, there has been a supply and demand imbalance that favors the VCs. Entrepreneurs needed a lot of money, there were only a few VCs with money (it’s a shockingly small industry, with less than 500 or so active firms, according to the NVCA). Accordingly, the VCs got to sit back and leverage their position of superior information and insight to choose their deals and drive favorable terms.
To read the full, original article click on this link: Why entrepreneurs seem to be growing fangs | VentureBeat
Author: Jeff Bussgang
