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The 'D' Word

6:00 PM -- The word of the day, to emulate Stephen Colbert, is "dysfunctional." That's the word Carly Fiorina has used about a dozen times in the last few days, in interviews on 60 Minutes and elsewhere, to describe the board of Hewlett-Packard, and it's the word that comes to mind in considering the decision by VC fund Sevin Rosen to shut down its Fund X over the weekend. (See VC Firm Gets Cold Feet; Startups Sneeze.)

The VC market is dysfunctional, said Sevin Rosen, because there's way too much money chasing too few good deals. That, of course, is a charge that's been leveled at the venture space for at least the last 20 years, and it's certainly no more true now than it was six years ago, at the height of the dot.com bubble.

Still, you've got to hand it to the Sevin Rosen partners for handing back the quarter-million or so they'd already raised for their new, now abandoned fund. I've heard from other VCs that "dysfunctional" might also apply to the relationship between the partners of long standing at SR and the more recent hires, who apparently have some disagreements about how to divvy up the pot. But making the "radical" decision not to go forward with a new fund is a lot more straightforward way of dealing with it than doing what both Fiorina and ousted HP chairman Patricia Dunn are doing -- which is blaming the board itself for the nasty revelations about the leak investigation.

Spying on your fellow boardmembers: now that's what I call dysfunction.

— Richard Martin, Senior Editor, Unstrung

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