VCs and the one percent rich
By Paul Mackintosh - 04/02/14
Silicon Valley VCs have not exactly covered themselves in glory as the year begins – to put it mildly. The embarrassment of Kleiner Perkins Caulfield Byers VC legend Tom Perkins comparing attacks on the 1% of wealthy global citizens to Nazi anti-Semitism was bad enough. “Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its ’one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ’rich’," he claimed. "Kristallnacht was unthinkable in 1930; is its descendant ’progressive’ radicalism unthinkable now?” It also didn’t exactly help to have the Wall Street Journal weigh in with a heavily political angle to defend Perkins as well, and argue that essentially, his comparison was just, and dismiss the “Perkinsnacht” scandal as “liberal vituperation.”
Then, however, Tim Draper of Draper Fisher Jurvetson weight in to say "on Tom Perkins, he is a brilliant man, and he is identifying schadenfreude, something that continues to be a thorn in humanity’s side. The bitter taste of envy brings us all down. I like to celebrate the wealth and success of great heroes like Sergey Brin, Larry Page, Mark Zuckerberg, Bill Gates, Steve Jobs, Elon Musk, and Larry Ellison.”
Perhaps the Silicon Valley venture community is feeling a little persecuted. After all, it’s only a month ago that AngelHack CEO Greg Gopman unleashed a storm of criticism by dismissing San Francisco’s homeless as "trash.” Critics zeroed in on the Valley’s apparent elitism, arrogance, insularity, and indifference to the rest of the community. And now we have Perkins exhibiting – well, apparent elitism, arrogance, insularity, and indifference to the rest of the community’s opinions. And being criticized for it. Can you wonder that the poor man feels persecuted?
But perhaps the most glaring giveaway is Perkins’s characterization of San Francisco as “the epicenter of progressive thought.” Draper echoes this self-adulation in his gallery of “great heroes.” Did these people really achieve so much? Wasn’t it Steve Jobs’s company that was recently in the dock before the US government in the ebook price-fixing case. And yet there seems to be a blindness among Silicon Valley VCs that perhaps is born of spending too long in the Valley. No wonder KPCB and DFJ felt a need to go to Asia and Europe to find companies like Baidu and Skype.
And perhaps, finally, one of the reasons for this nervous, angry, insularity and defensiveness is exactly the same syndrome as you see in investment bankers around the entrepreneurs they support. Perkins and Draper, after all, are investors, not entrepreneurs; money men, not technologists. As investment bankers grow rich with other people’s money; so they’ve grown rich from other people’s ideas. Perhaps that does leave them feeling a tad defensive.