A NY Times article describing the woes of the Venture Capital Industry interviewed a couple of VC veterans who had this to say about MBAs:
“The biggest names in the industry are concerned about low returns and are blaming several factors: funds that have grown too large, the M.B.A.’s that have invaded the industry and older partners who have lost touch with what is new in technology.”
[They] also attribute the venture industry’s struggles in part to the business school graduates who now populate Sand Hill Road offices, taking the place of the entrepreneurs who first formed venture firms.”
When asked to elaborate, the veterans offered this piece of insight:
“When too many venture capitalists serve on a start-up’s board with “no proper judgment, who have never built a company,” they tend to get too involved in running the company and, in high-pressure situations, imagine problems that do not exist, Mr. Horowitz said. “Their insecurity and own anxiety filters into the advice,” he said.”
Last time I checked, you had to have an MBA from Harvard Business School or Stanford to even think about breaking into Private Equity or Venture Capital. Simply put, private equity firms hire almost exclusively from the very best MBA programs because the schools’ networks translate into fund-raising dollars. The ability to display how many HBS grads you have on staff in the pitchbook you show investors is also a plus.
Maybe instead of generalizing all MBAs as thoughtless robots that that lack “proper judgment” the VC industry should rethink its hiring practices when it comes to recruiting young talent. Each MBA program has different strengths and weaknesses which are irrelevant of its ranking, brand name or alumni network. Not to say that HBS and Stanford don’t have their share of talented individuals, but diversifying the ranks to include a variety of graduates certainly seems like a good idea.
It is always easy to point the finger at someone else when things are going badly; considering the fact that you are responsible for creating the problem and working to solve it is a more difficult choice.
As the holder of an MBA from “another” school that was accredited by the same board of higher education that certifies all MBA programs, I find it strange how others feel that only Harvard and Stanford grads are valuable. Having graduated with honors and having saved my various employers hundreds of millions of dollars over the years (many of which were smaller than $50 million in sales) I find my abilities to turn around poorly run companies exceptional and often find myself correcting the wrongs of many such Harvard and Stanford predecessors who focused on the financial instead of the operational problems of a company. I’ll stack up my capabilities any day, any time and any where because as a Process Improvement expert, I know how to fix problems to make money and margin, not just how to manipulate the numbers to make Wall Street happy. Investors want LONG TERM value not short term profits that are unsustainable. I’m ready when you are.
Well, the bigger problem is that our nation’s players in government were the first to allow the greed game especially with the likes of Madoff. Investors and the Hedge Fund industry encourage the buying of CDO’s instead of Treasury bonds. There are many factors to blame that have nothing to do with “MBA’s.”
MBA degree teaches you the general management, financial, and marketing skills to run or start a company. A individual that graduates with an MBA degree, even from a top school, knows very little on how the intricate details the company he/she is working for but to rely on other more senior managers or directors to show them the ropes, what he/she is taught OJT is not the problem of the school. The MBA degree gives you the opportunity to get into a great company, we cannot blame schools for bad decision makeing or lack of common sense by their students. We all like to hide behind the numbers but sometimes it make sense to step back and take a look at the whole picture and I believe MBA schools teach that pretty well but it is up to the individual to use it.