Nigerian VC firms are considering collaborating to check unethical founders

According to three corroborating sources in the local venture ecosystem, VC firms have begun conversations about sharing information. The thinking is that sharing information will help stop rogue founders from replaying their scripts for several investors. The common thread from these sources, all of whom asked to remain anonymous, is that VCs have borne the brunt of unethical founders who see venture money as a private chest and a ticket to a better life. ”Why would I raise capital for a founder to build personal houses abroad in the name of offices?” the aforementioned GP asked.?

When asked how VC firms are unable to spot such questionable founders during their due diligence processes, the GP said, “Most VCs only do their due diligence before they invest. Then they throw in money and hope the founder multiplies it for them. What we fail to realize is that it’s a huge temptation for founders to have sole access to the kind of money they have never managed before. That’s when strange thoughts and ideas come, and it takes a high degree of integrity to stay in line. Sometimes, it’s not even their fault. There should be checks and balances to help these founders.”?

From the outside, I totally believed that one can imagine VCs at the top of the ecosystem pyramid, controlling the flow of funds and immune from the antics of founders. But that picture is hardly correct. VC firms rely on the accountability of founders to thrive and make critical decisions. Where accountability and integrity become questionable, VCs are backed into really tight positions—and?bleed a lot of dollars.

Credits: TechCabals