Limited Partners Want Their Money Back
from the the-fight-is-on dept
Earlier this week we posted an article about venture capitalists downsizing. Red Herring has a much more indepth article about limited partners bailing out on VC firms. It's a very interesting read (even if Red Herring insists on splitting it up into too many pages - once again I beg the Red Herring folks who read Techdirt to offer a "single page view" option). Basically, many LPs (the people and companies who invest money in VC funds) are refusing to pay what they owe and are trying to get their money back and/or force the VC firms to cut back on both their carry and management fees. They point out that VCs, themselves, are taking home millions of dollars in salary while they lose money for their investors. Of course there are a lot of issues that go into just not giving the money you promised and lawsuits (from both sides) may show up eventually. The most amusing thing, though, is that a part of the article talks about Eric Greenberg (who founded Viant & Scient) demanding his money back from Benchmark. There's a whole chapter in the book eBoys about how Benchmark turned Greenberg (who at the time hated VCs due to his experience with them at Viant) into a fan of Benchmark. They even mention that Greenberg is going to join the board of (get this) Red Herring, where they hope he'll help to promote Benchmark. Also amusing (and mentioned in the article) is that Greenberg's latest startup, 12 Entrepreneuring - an incubator of sorts, was forced to give back its own money to investors who felt that it was going nowhere. One of those investors? Benchmark.
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