Motley Fool Adrift on VCs

What gets into people at Motley Fool sometimes? In a missive this week a writer there imagined a fanciful world where a) investment banks all have venture capital “departments”, and b) where said groups actually make money. Even more bizarre, MF uses as its poster boy for shareholder-friendly behavior:

Wall Street firms make enormous profits from their venture-capital departments. So when they invest in a small, high-growth company, they’ll often delay the IPO to get in on the action before they actually open the company up to the public. They tried to do this with, but the company withstood the pressure. Instead, Overstock management — in what was described as a maverick and foolhardy move — issued the IPO via a Dutch auction, which leveled the playing field for small investors.

[via MF]


  1. The ‘Wall Street is bad’ theme is a convenient one for most people. This approach panders to MF’s primary crowd. Make them feel good and that they are sticking it to the man. It’s par for the course for them to off this kind of advice. Pay no attention to the overall averages of their stock picks.

  2. Back in the day, I used to be a big fan of MF. I admired their contrarian (and accurate) stance that most mutual funds were a waste of money, with the exception of index funds. I also appreciated their anti-broker stance and general approach to investing.
    But I lost faith about 3 years ago for the simple reason that they started pushing all the services they originally denounced. They’ve clearly lost their way. Sadly this seems to indicate that they’ve lost their smarts too…

  3. There are pieces of MF which are usefully looking at widely-ignored issues, but they’ve seen better days.
    For a focus on Silicon Valley, try
    The latest pieces:
    Myth #3: Rent Is Wasted Money can be found at:

  4. I’m sorry, but is there anybody who isn’t a sad-sack demi-daytrader who takes Motley Fool seriously?