Some of My Favorite Books that are *Secretly* Actually About Venture Capital
I figured we could all use something a bit lighter this week. One of my favorite trends on venture capital Medium has been people taking any new pop culture development and finding some ludicrous and beautiful way to tie it into our industry. Figured my B.S. (yes, Bachelor of Science degree) in English literature certainly qualified me to do the same. Hope you all enjoy, warning, spoilers ahead.
1. Hamlet — William Shakespeare
“To be, or not to be” — that is the question I frequently ask myself when running due-diligence on companies. Shakespeare obviously had the tortured world of venture capital on his mind when he wrote about the Kingdom of Elsinore.
Much like Elsinore, venture capital is often a world of hatred and deceit. Just like Claudius kills Old Hamlet to seize the throne, in venture we often have partner to partner relationships that turn sour, leaving in one partner being ousted. And when this happens, sometimes the entire firm can implode too.
I find that Hamlet’s indecision and his acute melancholy reflects the mental state of a pre-partner associate at firms with such toxic relationships. You existentially know that you need to act, however find yourself unable to do so for unknown reasons or fear of what comes with it. In Hamlet’s case, death.
2. Moby Dick — Herman Melville
In many ways, Moby Dick, at its core, is a book about capitalist motivations and the constraints of leadership and bureaucracy in a capitalist ecosystem. I think you can make a solid argument that the driving conflict in Moby Dick is between the capitalist and responsible nature of Ishmael, and the artistic, revenge-driven eccentricity embodied by Captain Ahab. Is Ishmael actually interested in whaling over being in the merchant service? Or is it the financial responsibility surmised by the glorious life of a Nantucket whaler that draws him into the messy world of the sea?
The white whale, in this framework, then stands to represent portfolio construction, and the pursuit of investing in a mega-Unicorn startup. As venture capitalists, the crew of the Pequod struggles to embrace Ahab’s portfolio construction model of moonshot hunting in favor of a more respectable spray-and-pray approach to accrue multiple low-medium value grey whale assets instead.
The lesson that we as modern-day VCs can take away from this is that responsible portfolio underwriting and a low to medium risk tolerance better serves the longevity of the firm. We constantly run the risk of becoming Ahab and losing our entire livelihood in pursuit of one ultimate win.
3. Frankenstein — Mary Shelley
If anything, the main takeaway from the moral struggles of Dr. Frankenstein and his monster should be that a VC should never directly control the development cycle of a startup. To me, the story of Frankenstein is nothing more than the story of a venture capitalist who guided a startup to a bad business plan, and now has to decide whether they introduce a new evil into the world by creating another monster (investing additional follow-on capital) or face the consequences that winding down operations at the startup would bring.
Frankenstein’s monster tears apart Dr. Frankenstein’s family, much as failing startups can tear apart the GP dynamics at a venture capital firm. And now, Frankenstein, as the last remaining GP must decide whether he can allocate his follow-on capital. Frankenstein’s due-diligence process is exhaustive, leading him to the end of the world. At the end, Dr. Frankenstein finds himself unable to wind down operations at the startup, and dies, an unsuccessful venture capitalist.
Harsh, but a story we see all too frequently in the industry.
This might turn into a monthly series — stay tuned ;)
