Michael Bloomberg: Banks and Venture Capitalists Can Be Entrepreneurs' Worst Enemies
Michael Bloomberg stated in his writings and recent podcast references that banks and venture capitalists can become entrepreneurs' worst enemies: they create doubt in founders' minds and mistakenly believe that their "clever insights" can help founders manage new businesses effectively.
He continued to write: These individuals often kill different, unique, and still-potential ideas. Early venture capitalists, whom he described as those who "were born on third base but think they hit a triple," assert that a company is too unstructured to predict growth accurately, and after leaving, they advise partners not to buy products from Bloomberg.
Bloomberg's own path contrasts with this: when he was fired from Solomon Brothers, he took away about $10 million in severance pay and the next day started a business based on unverified desktop financial information ideas. He insisted on developing products and sales simultaneously, postponing accounting and logistics, and adhered to the principle of "building rather than buying." The company did not follow the typical venture capital holding route, and he still holds about 88% equity, with annual revenue later exceeding $13 billion.
During this time, he emphasized not waiting for a complete plan: "We acted from day one, while others planned for months and were still planning." His business principles also included not playing fair, entering with an advantage, and the ultimate state being accountable to no one. He rejected five-year plans and the "Great Leap Forward," stating that central planning was ineffective for Stalin, Mao Zedong, and equally ineffective for entrepreneurs.
The current narrative in venture capital remains about power laws and scaling: a few companies take most of the industry's returns, with funds concentrating on the AI execution layer, and the early notion of "only investing in potential" has been replaced by "only investing in execution." Critics also point out that venture capitalists, to accommodate power laws, actively create risks for portfolio companies, shaming stable profit-making businesses as "lifestyle companies."
In market mechanisms, this is about control pricing rather than product pricing: what is bought is a predictable growth curve and a governance template that can replace founders, while what is sold are odd products that cannot be standardized. Beneficiaries are investors who can transform companies into fund models; those under pressure are founders whose products have not yet been understood by templates but have already been advised to change direction. What Bloomberg's terminal later consumed was precisely the opposite sequence of "first providing the growth model, then the product."
Additionally, the podcast revisited this statement from his memoir at a time when large AI rounds and "post-AGI funds" are running parallel: there is more money, but tolerance for "different, unique, and potential" may not be higher.
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Bloomberg built his terminal with severance pay instead of giving voting rights to funds. After leaving Solomon, he chose to prioritize product development and sales, turning media into a demand engine for the terminal rather than an independent story. The core of this path is not anti-financing, but against the illusion that "investors understand business better than founders." He was able to retain about 88% equity because the first money came from his severance check, not from funds demanding board seats and growth templates.
Capital flows into tracks that can tell power laws in the venture capital model. A portfolio must grow into that one big prize that can cover a bunch of failed projects, so "different" is first translated into risk, then into governance issues that need correction. Critics like Catherine Bracy point out that venture capitalists not only select high risk but also create high risk for companies: pushing speed, changing tracks, shaming stable profits. The type of visitors Bloomberg encountered early on were those who wrote unpredictable growth as original sin.
This contrasts with the garage beginnings of Hewlett-Packard, Costco's refusal to sacrifice inventory for quarterly stories, and the contemporary AI rounds' tone of "only looking at execution, not potential." The industry phase is characterized by abundant funds and tightening templates: firms like Bain are raising "post-AGI" funds, drone logistics can talk about $20 billion valuations, but non-standard products still need to pass growth narrative security checks first. Bloomberg is on another line: making the terminal an infrastructure, then letting news serve the terminal, rather than turning the company into the next exit story.
Structure belongs to the transfer of pricing power. Venture capital shifts the pricing power of "how to run a company" from the product market to the fund model; if founders accept this insight, differentiation is smoothed out in the boardroom. The mechanism is: funds must deliver comparable trajectories to limited partners, and incomparable traits will turn into defects in due diligence language, which then become potential that must be killed.
ABAB News · Cognitive Laws
- Insights from investors are often the funeral of differentiation.
- Power laws require big prizes, and templates will first kill outliers.
- Your first check determines who has the right to change your business.