I've always loved Willy Wonka's line: "the suspense is terrible, I hope it'll last!"  Unfortunately, that doesn't apply to blogger output, so I have to apologize.  It's been a slow start to the year, but I've got about a half dozen posts in various states of completion and a bunch of travel coming up (remember, about 105% of my annual productivity comes on planes!)  So stay tuned for some thoughts on "The Gong Show," "Why Asset Allocators Need to Keep Their 3-D Glasses after Seeing Avatar," "The Future of VC Funding ," and a handful of others . . .

In the meanwhile, I've been meaning to double-click on an old post. In June of 2008, I feared that some GPs were falling victim of Greek tragic cycle described below.  In goofing around on the topic, I suggested that the final stage, Nemesis, or punishment by the gods, wouldn't be so bad for the PE Tragic Heroes.  Instead of suffering eternal pecking like Prometheus, they'd just have to toggle some P-I-Ks.  Boy, was I wrong!  Think about it: the punishment being meted out today would merit Homeric mention. 

For example, GPs keep talking about having to do multiple "first meetings" with the same organization.  It sounds totally Sisyphean; this cartoon is perfect.

Or those Tantalus-like GPs with hard-circles from investors oh-so-close, but just out of reach. 

What about those cats who call and call and call potential investors without getting any return ring-backs?  Kind of like a poor, modern-day Echo who lost the power to speak first.

And pity the poor junior partner who's in charge of the draft pitchbook or PPM, gazing longingly at it forever, like ol' Narcissus.

It's almost enought to make you feel bad for some of the GPs wandering the countryside.  And the least we LPs can do is offer some Xenia, or hospitality.  Be a sport and remember, in mythical times the gods sometimes roamed the earth in disguise, lavishing gifts on those who offered hospitality while punishing those who didn't.

[Originally published 6/9/08]

Tragic Kingdom

When it comes to real twistedness – I mean deeds that are
way out in the tails of the normal distribution of human behavior – the
old-school Greek tragedies are heard to beat. 
Loathsome cunning and guile? 
Check.  Outlandish interpersonal
relationships?  Check.  Unbridled greed and lust for power?  Check.

Of course, the tragedies were morality plays that showed the
audiences of Epidaurus
what vices arose when virtues were taken to their extreme.  Remember that the Tragic Hero was a hero
first and tragic second.  And what made
these stories so compelling and spectacular and gut-wrenching was just this
journey from mortal to casualty of the gods.

A wise man once said that there were only a few dozen
archetypes in all fact and fiction. 
Lately, I’ve been wondering if some private equity pros might not fit
the Tragic Hero archetype.  Now don’t get
me wrong, there are a ton of virtuous and honorable people in private
equity.  I invest in people that are – to
a man (and woman) – decent and upright. 
That said, I sometimes think there are a handful of PE investors out
there that have fallen victim to the ancient unraveling . . . 

The cycle goes like this: first you have arete, which is some kind of
excellence.  Occasionally, this is known
as an outstanding Fund I or II or even VI (or even maybe a single headline
exit).  Once in a while, arete mutates into its sinister cousin: hubris. 
Things get really dicey when the excessive pride of this second step
leads to ate, an unruliness marked by
a loss of sense of human limitations and reckless behavior that offends the
gods.  Now the gods tolerate a lot of
horseplay, but mortals should act like mortals and those that get really out of
hand provoke nemesis, the vengeful
justice of Olympus.

The genius of the tragedies arose from the fact that the
behavior was so outrageous and the punishment so ghastly that the stories
offered powerful warnings of what might happen if folks got too far out of
line.  Of course, I never root against
anyone, but I do sometimes wonder if we’re not getting off too easy
nowadays.  Nemesis used to be pretty badass: offend the gods and you get your
liver pecked out by eagles.  Every
day.  Forever. 

Today, the PE Tragic Heroes who have incurred the wrath of
the gods (or their bankers) are simply consigned to slow their pace of
investment, toggle their PIKs, and maybe get an askance mention in the Wall
Street Enquirer Journal.  If
the fates are particularly unkind, the Journal’s ink dot hedcut of the
Fallen Hero transforms from cheerful and affable to frowning and consternated, a la Dick Grasso.  Not quite the kind of
metamorphosis that Ovid would write about, but I guess that’s the best we can
hope for in a modern world where all the options seem free (but someone else is
paying the price.)