the paperwork, they take advantage of entrepreneurs who haven’t been through
this before. They do things on terms that favor them in a way that really can’t be
justified—that take advantage of their ignorance. It’s not a good way to do
business. Some of the VCs try to rationalize it, “This is just the way things are
done.” Well, I’m sorry but they’re wrong. Why do you think venture capital also
enjoys a reputation as “vulture capital?” It’s not an accident; it doesn’t have to
be that way.
Livingston: Did you try to...

the incentives.
Livingston: What would you tell an entrepreneur to understand before he/she
meets with a VC?
Kapor: I try to explain how it works. There are more choices nowadays for
people—angel money, for example. And many things are much less expensive
to do now. You can go further on your credit card than you could before. I want
entrepreneurs to make informed choices when it comes to financing. Understand
what the impacts and implications are for different financing options.
Livingston: Plus, many people don’t need to have as much money to...