VCs aiming too high
Christensen said he thinks the venture capital world needs to be disrupted because it is focused too much on making big killings on big investments at a time when there are plenty of good smaller investments to be made on companies that will be disruptive.
He offered as an example his friend, former Massachusetts Gov. Mitt Romney. Before teaching, Christensen ran a small company in Massachusetts at the same time Romney started Bain Capital, and the firm invested $1 million in Staples when it was just starting out.
Romney actually took the time to call and to ask him to buy his supplies from Staples, even though he was just a small business. But when Christensen some years later sent another friend who was raising $1 million for a good idea, Romney told the man that Bain didn’t make those kinds of investments any more. They only wanted to invest $10 million or more.
“Venture capital is always wanting to go up market. It’s like the Rime of the Ancient Mariner. 'Water, water everywhere and not a drop to drink.' People in private equity complain that they have so much capital and so few places to invest. But you have lots of entrepreneurs trying to raise money at the low end and find that they can’t get funding because of this mismatch. I think that there is an opportunity there.”
http://www.bizjournals.com/sanjose/news/2013/02/07/disruption-guru-christensen-why.html?page=all
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