The VC’s Customer (continued)

Rafer sez:
I don’t agree with Fred on this, which isn’t comfortable but needs to be said. I think the VC is the customer.

Shareholders are simply a special kind of customer, who are buying a less well-defined good for fairly significant money (in terms of dollar scale, regardless of pricing) and therefore very reasonably getting a special say in how that good is defined.

I got into this conversation last night with the new CEO of Shozu Chris Wade, who agrees with me on the point above. We realized that much of the later angst about VC deals is that we are all analyzing the deals wrong. We’re looking at the deal terms solely at the moment in time that the deal is being done.

These customer-supplier relationships normally last years. We all need to figure out a Lifetime Value of the Customer analysis, which we do not yet have.