The inherent tensions within venture capital

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This is our Wednesday show, the time of the week when we niche down to a single topic. Today? The issue of venture capital expectations in certain sectors where startups may not be the best fit. And what happens when they raise a mountain of capital.

Natasha and Alex had former founder and present-day indie journalist Vincent Woo come on the show. Why? Because he’s written extensively about Lambda School, one of our subjects of the day:

• We started with Ro, and Natasha’s excellent piece on the matter: Employees detail rising tensions at Ro as healthcare unicorn struggles to grow beyond first win.
• Next we chatted about Lambda School, which has a well-documented history of raising venture capital and attracting controversy. Most recently, Woo published a piece about the coding bootcamp’s misleading claims on job placement. The company is perhaps a cautionary tale of how venture-level growth can struggle in certain sectors. Education is hard and may not scale like software.
• At the heart of conversation was a question: In this time of high valuations and easy access to large amounts of capital, how can VC incentives lead some startups into a cycle of pain? We didn’t land on a single conclusion, and that was kind of the point of the episode. Venture capital isn’t inherently bad or good, but the money can come with a list of demands (and pressures) that cause risk-taking founders to make mistakes. A recalibration is necessary, but, as we talk about every week, the “up and to the right” market will take its time getting there.

It was good fun to focus on a single topic, but we’re back with our news roundup Friday morning! Chat soon!