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by NaturalDoc
5198 days ago
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How is competition "sub"-ethical? Competition drives innovation. VC's say it all the time, the IDEA is worthless without excellent implementation. I find it perfectly admirable that a VC would invest in two companies that have the same idea. It helps the VC feel more comfortable with their investment and adds enough competition that the two (or more) companies will have to do their extreme best to come out on top. The VC wins, the best company wins and the customer wins. Sounds like something Apple might consider unethical, but it's really not, it's competition. |
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The most common problems happen when privileged information is exchanged between the competitors.
An example: Company A discovers a killer marketing technique that gives them a big advantage but they keep their success quiet. Then the shared VC tells Company B about it. Company A loses their competitive advantage (driving up their costs, etc).
That's one of a myriad of scenarios where information exchange can be unethical and highly damaging. The hard part is that even if your VC is 100% ethical they can easily make mistakes that cause problems.