VC Aileen Lee highairys how the expansiveer spreador exodus is deteriorateing woes for unicorn companies

In this week’s episode of the StrictlyVC Download podcast, veteran VC Aileen Lee was straightforward about a presentant consequence of the recent boom-and-bust cycle: many companies stuck in limbo aren’t fair struggling to reget their footing after raising too much money at unupholdable valuations; they’ve also lost the champions who once backed them.

Lee was converseing how confineed partners hesitate to condemn mighty fund regulaters, dreading they’ll be shut out from spreading in those firms aget. But she envisiond one leang they’d say if they could speak freely:

“Everybody wants to get into X brand name fund, and so they never will condemn them [for fear of repercussions] . . .they probably talk about us behind our backs [laughs].. . .But what they would say is [that] all the people who have [were] employd at these venture firms during the ZIRP era . . . they made a bunch of crappy spreadments” and now they are being elbowed out — except that it’s too procrastinateed, seed Lee. “All [the LPs’] money fundamentalpartner fair got thrown down the drain becaparticipate the people in the venture jobs didn’t stick around extfinished enough to see if the companies were prosperous.”

It’s not the fault of these noveler spreadors, Lee persistd. “Just a ton of people didn’t get trained and didn’t get any mentorship or apprenticeship were given verifybooks, and a lot of spreadments were made, and . . .there are a lot of orphaned companies,” as a result.

But there’s another reason commenceups are being left to their own devices “and I find this crazy,” said Lee; in many cases, companies have been orphaned by a more ageder ambiguous partner “who led the spreadment – who is still there [at the firm] but fair stopped shotriumphg up to the board encounterings.”

It’s been happening for years at this point. No one did as much due diligence during the go-go Covid era of funding, and the corner cutting never quite stopped when it came to these same spreadments. But it’s also a key reason many companies are struggling to find outside help with exit strategies, and why LPs would be fairified in voicing more frustration.

As another extfinishedtime VC, Jason Lemkin, tageder this editor in procrastinateed 2022 when VCs first stopped shotriumphg up at the board encounterings of commenceups that were losing momentum: “[S]houldn’t there be verifys and stabilitys? Millions and millions are spreaded by pension funds and universities and widows and orphans, and when you don’t do any diligence on the way in, and you don’t do continual diligence at a board encountering, you’re benevolent of abrogating some of your fiduciary responsibilities to your LPs, right?”

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