Venture capitalists are hurting and having worked for one, personally I don’t feel particular sympathy toward the industry as long as it disregards the idea of “use value” and continues to operate on pure greed. When I say greediness is bad I don’t mean you should give up your allowance or start acting like David in Nick Hornby’s How to Be Good. What I mean is that a focus purely on the market value (exchange value) of the firm and a disregard for the effects of its products on people’s quality of life is practically and morally unsustainable. Recently some venture capitalists have started to look into debt financing instead of equity financing. Writes Mike on Techdirt: having debt makes you much more focused on succeeding, since you have the pressure to make the interest payments. It really helps to focus and motivate you. For a while now I’d been wondering why companies always look to raise venture capital instead of taking on loans. The obvious answer is that a capital investment doesn’t need to be paid back like a loan. Exchange-value focus seems built into the very structure of equity financing. I wonder if other forms of financing might direct the focus towards a more balanced approach? Here’s a Red Herring article on the VC turn to debt financing.

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