It's no longer enough for venture capitalists to give a startup millions of dollars without any promise of return. Now, the New York Times says, app creators must also be "coddled as royalty" by their middle-aged benefactors.

Going straight from the dorm and onto the throne is perhaps the Silicon Valley myth. But the Valley's newest crop of billionaire investors are turning that myth into a mantra.

DealBook describes how investors like Andreessen Horowitz and Founders Fund are pampering their venutre-backed entrepreneurs with everything from "exclusive soirees with business titans and celebrities" to trips "to an island resort by seaplane." It's a playbook lifted straight from Hollywood, where talent agencies nurture artists and turn them into narcissists.

When they became venture capitalists in 2009, Marc Andreessen and Ben Horowitz sought to treat start-up founders as celebrities. They modeled Andreessen Horowitz after Creative Artists Agency, the Hollywood talent firm. Bucking the industry standard in venture capital, Andreessen Horowitz allocates about 90 percent of the firm's profit to the employees who run a professional network for the entrepreneurs, Mr. Horowitz said.

"What we try to do is make the firm the proxy network for the founder," said Mr. Horowitz, who counts rappers like Kanye West and chief executives like Donald Thompson of McDonald's among his friends. "Instead of being transactional, we go, 'Tell us what you're trying to accomplish in your career and how we can help with that.' It's a long view of talent."

The new investor ethos goes beyond coddling their investments. In some cases, firms are giving up their rights as investors to land a deal:

[Felicis Ventures] said on Tuesday that it would always support its entrepreneurs on company matters, giving up the right to vote against them. The unusual policy — which some in the technology industry see as a gimmick — formalizes what is often an unwritten expectation in Silicon Valley. [...]

"The one thing that we always say internally is our success is predicated on our founders' success," [Felicis Ventures' Aydin Senkut] said. Signing a written promise to always vote with the founders, he added, "makes a really strong statement that we will not block any sale. We will not question the management."

Emphasis added. The pro-entrepreneur shift is partly due to increased competition. In the first half of this year, venture capital funds raised $17.3 billion. That compares to just $7.7 billion raised in the first half of 2013, the Times reports. All that money being pumped into startups means firms are scrambling to get in on hot companies, which is "a sign of an overheated market."

But formalizing that "unwritten expectation" of always backing founders is a dangerous one, especially if an entrepreneur goes off the rails. As Venrock's David Pakman put it, "If you've pledged you'll always vote in favor of what the founder wants to do, you might be voting on the side of a criminal."

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Photo: AP