[questerzen]

PG does appear to want to do a better job than the rest of his industry and he should be applauded for that.

But there is very little evidence that PE or VC funding adds much value to a company through advice or services: the poor performance of post-boom PE funds and their companies, for example, suggests that such claims are vastly exaggerated. I recently had a conversation with the head of a very successful fund who, reflecting on the aftermath of the financial crisis, openly expressed his doubt that his fund had really helped the companies they bought stakes in. He, of course, became exceedingly rich and the steady stream of inflated IPOs produced healthy returns for the funds investors (at least until they didn't.) A large part of the problem is that the compensation model (the traditional "2 and 20") is geared towards the capital providers not the entrepreneurs or indeed to social benefits. Funds are incentivised to raise huge sums of capital from sources who offer nothing but cash and a healthy appetite for risk and over-capitalise the companies they fund (the fund earns 2% on invested external capital regardless of how it performs). To compensate the investors, the funds rely almost exclusively on extracting a very large profit from the few "unicorns" that succeed outrageously (of which the fund gets to keep 20%, or sometimes more). Taking $100 million from a single company is hard to justify, however greatly you value the advice and support you got. And the many worthy productivity-enhancing near-successes are left to flounder. PG may like to focus on the positive impact he is having helping founders succeed, but the reality of his business model is strongly skewed to financial rent extraction.