Is VC model broken take a look at this story

VC model is broken: PreMoney disrupters offer ways to fix that

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Dave McClure of 500 Startups offered a daylong conference for venture investors on Thursday that focused on innovators in early stage investment.

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Cromwell Schubarth

Senior Technology Reporter- Silicon Valley Business Journal

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Several hundred Silicon Valley investors took a cold shower with 500 Startups’ Dave McClure acting as their remarkably cordial, yet hard-snapping, towel boy on Thursday.
At the accelerator’s first PreMoney conference, VCs and angels heard a laundry list of things that are broken with the venture capital model and were offered some examples of innovations to fix the problem.
“To say the VC model is broken is probably a little simplistic,” McClure told me before the conference. “I think that has been said for the last 10-20 years.”
But the situation has gotten worse for VCs, he said, because startups today need a lot less capital than before and accelerators like 500 Startups and Y Combinator are creating better-educated founders.
So McClure invited VCs to a daylong session in San Francisco to hear from investment innovators, including YC co-founder Paul Graham, AngelList co-founder Naval Ravikant, First Round Capital Managing Director Josh Kopelman and Marc Andreessen of Andreessen Horowitz

Startups have the upper hand

YC’s co-founder Paul Graham told the group that the landscape changed because founders have an upper hand on investors in early stages that they didn’t have before.
“You still need their imagination and energy as much but they don’t need your money as much,” Graham said.
Finding out what founders are complaining about and adapting will be key to making money in the changed ecosystem.
“Investors make more money as founders’ bitches than as their bosses,” Graham said. “This is good because it is a lot less work to serve founders than to micro manage them.”

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Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.