January 27, 2013, By: Mark Glennon
Illinois candidate for governor Kirk Dillard last week ripped the entire venture capital business as part of his case against Bruce Rauner, one of his opponents in the upcoming primary election. Among Senator Dillard’s comments:
If you know the venture capital world it’s my-way-or-the-highway…. If there’s just one industry where it’s my way or we’ll just steamroll you — that’s the venture capital world…. You gotta understand that kind of business. There was a presidential candidate that called it ‘vulture capitalism’ and there’s a mentality in that business that’s ‘my way or we’ll just buy you out.’
Senator Dillard had long been an unequivocal friend and champion of the venture capital industry. For years he has supported its legislative agenda, met regularly with leading figures in it, and raised campaign contributions from its members. That goes back to at least 1999 when he chaired a legislative task force to find ways to help the venture capital and tech startup communities (at which I testified).
Never once there, or in any of many meetings I’ve been in with him and venture capitalists since then, has he expressed any concerns about how the business is conducted. Interestingly, the same goes for every leading Democratic figure in the Illinois legislature (except Madigan, whose views are unknown to me).
The “presidential candidate” Senator Dillard referenced could be either Newt Gingrich or Barack Obama. They both played that same “vulture capital” card in their campaigns against Mitt Romney. It was bullshit then and it’s bullshit now. Study after study has shown that the venture capital industry is a massive generator of jobs and innovation, and creates value by bringing operational expertise to the companies it invests in. We’ll be detailing that evidence in a separate article.
Comparison of Dillard’s positions on this to Obama’s is more appropriate than you may know, or that Mr. Dillard seems to remember. Stunningly so. Obama, too, was a great friend of the venture capital industry when he was in the Illinois Senate with Dillard, supporting its legislative agenda, taking its campaign contributions and never voicing the slightest criticism. His Small Business Administration funds part of the industry, funding his administration has sought to expand.
And it was Kirk Dillard himself who hammered Obama for hypocrisy on this when Obama reversed his position. Said Dillard in 2012:
The President has private equity amnesia from his days as a University of Chicago professor, legislator, and he and the First Lady’s days working at the prestigious Sidley Austin Law Firm…. The Barack Obama I knew in Springfield was very pro-private equity, private capital, and high technology…. Mr. Obama clearly had many friends in the private equity business when he was a legislator….
Amnesia, indeed. Maybe there’s something in the water they both were drinking in Springfield.
I’ve been in or around the venture capital business for many years and am a huge fan of it. I’ve also known and liked Senator Dillard for a long time, so I was pretty disappointed by his comments, to say the least. But my heart tells me compassion and a second chance are in order. Dillard has been saying so many contradictory things and wounding himself so frequently that I really wonder what’s going through his mind, and I’m hoping the Kirk Dillard I know will resurface, start thinking straight, and focus his campaign on the issues.
This, however, I say emphatically: Venture capital is funding tens of thousands of great jobs in Illinois. The last thing Illinois needs is a governor who demonizes it.