If VC's behaved like Central Bankers

Imagine the scene down at the Hope & Anchor, watering hole for the entrepreneurial classes:

"Hey - we just got our follow on funding!"

Awesome, Congratutalions, Yays and w00ts in equal measures, drinks are bought, and the regulars settle down to hear the tale.... The CEO takes the floor:

"Yes, it was simple really - we just told all the VC's that there was no alternative, it was fund us or we all go bust, and that there would be total disaster if they didn't."

At that point a grizzled tech blogger coughs and says "But hold on - you guys spent your previous funding like there was no tomorrow, heck you made Boo.com look parsimonious, and you had already flamed out big time"

Scrape of chairs......but the CEO grins and says:

"Yeah, I know - but they said no worries, let bygones be bygones, its a new deal and we'll start afresh. Heck, they even valued our assets at the inflated book price we put in the year's year end accounts!"

In the corner, an M&A old soak says "OK, cut to the chase" - how much did they give you and how much of a stake will they take"?

The CEO positively crows:

They gave us the whole 7 yards, and they said they didn't want a stake at all - and in fact they'll guarantee our existing stocks and options at book once the money's in our trousers! And no guys on the board to oversee the spend either.

At this point there is an awed hush round the room, not a w00t is heard....it is impossible for anyone to imagine that dreamlike scenario - full funding with no stake, valued at inflated book prices, the execs allowed to keep their jobs, loot and made whole.

"Who are these VC's whose largesse knows no bounds", someone eventually asks.

"Oh, Capitol Capital", says the CEO "New outfit in the game. Head used to be a CEO, has a big backer in the background beating the bushes for bread - they ran rings round the LP's in the funding drive"

"And who are these dumb LP's and that who fund them?", someone asks, already clutching a biz plan to whiz round and get a snout at this magical trough.

"Oh that - they said don't worry, they'll sort it - they have a fund from a large lump of mom and pop investors and pension funds - and get this, they have to keep on paying into it! Said they'll tell em its for their own good, and they also said they'll get enough to sort out anyone here who needs some cash to bail out their dumber moves"

There were smiles all round as all the entrepreneurs started polishing off their business plans to get some of this wondrous largesse.

Update - I see Fred Wilson has written a similar, albeit more serious piece over here today