Venture Capitalists are MUCH LESS ambitious than their private equity siblings

"Fundamentally VCs are risk adverse – they want no risk in the deal,
if we could handle risk we'd be entrepreneurs."
– Victor Westerlind, General Partner at Cleantech VC firm Rockport Capital

From our post "Climateer Line of the Day: Venture Capital Edition".

And from Auren Hoffman's Summation blog:

Venture capitalists rarely take their own advice when it comes to their own businesses.

There’s a common narrative that venture capital doesn’t scale. That narrative is so well accepted as truth that venture capitalists themselves don’t bother taking the advice that they generally dole out.
Here are some common truisms that are often passed down by VCs but aren’t applied in their own business:

Establish dominant market share and become the very best. VCs advise companies to find a niche and exploit it — and do not enter a super competitive space. But the venture capital industry is crazy competitive — often competing with 100 firms (that are usually staffed with super-smart people).

Have one CEO. VCs advise companies to have one core decision-maker. In the rare case, maybe there is a co-CEO. But many VC firms are run as a partnership with 3–8 equal partners (though some partners may be more equal than others). They’d never invest in a company run by committee.

Founders should demonstrate deep commitment to future value creation by taking low salaries. But VCs do not usually trade some of their short-term salaries for long-term upside. Most VCs pay themselves salaries out of their typical 2% management fees. If VCs took their own advice, they would be using most of that 2% fee to build systems and invest in the future. Or they would trade the bulk of the management fee for greater carry.

Companies should invest in growth and market dominance over profitability. But VCs themselves are extremely profitable. They do not hire aggressively, invest in technology, spend time on automation, or make any of the other investments in themselves that they would expect their portfolio companies to make....MORE

Related:Arrgh: 'Pirates Not a Good Long Term Bet'

...The WSJ's Deal Journal has a comparison of Piracy and Private Equity:

...Geographical investment thesis

Private equity: Bullish on China.

Piracy: Opportunities on the coast of Africa.

Start-up costs
Piracy: Gun, boats, a handful of men, rocket-propelled grenades.
Private equity: Office on Park Avenue.

Jargon
Private equity: “Internal rate of return,” called IRR.
Piracy: Eerily similar: “Aaar.”>>>MUCH MORE