Chancellor puts investment into blind trust

I'm not even sure if this is a story, but it seemed interesting to me. It seems that UNC's new chancellor Holden Thorp was a partner with an RTP-based venture capital business that supports biotech start-ups.  The chancellor had planned to continue his role there, but his brother Clay Thorp (who went to UNC with me) is the general partner there and felt it would be best to cut official ties.

Thorp is no longer a venture partner at Durham’s Hatteras Venture Partners, says his brother, Hatteras general partner Clay Thorp. And Holden Thorp’s equity stake in Hatteras has been put into a blind trust.

Clay Thorp says the decision was made as Holden Thorp took over the top spot at UNC on July 1.

“We decided mutually that it was best for him to have no formal role,” Clay Thorp says, “and to avoid any confusion.”

Holden and Clay Thorp still have informal discussions about science and business, Clay Thorp says. But that’s as far as Holden Thorp’s relationship with Hatteras goes.

Triangle Business Journal: UNC chancellor cuts ties with Hatteras Venture Partners, 8/26/08

So I think this is probably a good thing, seems ethical, etc.  But I note that he didn't give up his stake, just converted it to something he can't access directly.  But I dont know much about how investments work. (And I am allergic to the term "venture capitalist.") What do others think?

Random goodie: the article I referenced above was written by Chris Coletta, formerly a regular commenter here on OP when he was on the DTH staff (and afterward, I think).

Issues: 

Total votes: 111

Comments

Ruby,

I think it's probably OK that Chancellor Thorp keep his investments in a blind trust while he's in his current position but there still might be some conflicts. Since his brother Clay is running a venture (vulture?) capital firm investing in biotech startups it wouldn't be a surprise if that firm invests in some UNC startups. Now if that firm gets to "cherry-pick" the new ideas coming out of UNC and those new ideas blossom into successes then Holden might benefit from his blind trust investments. But so would UNC. And it's also possible that some promising ideas coming out of the University that might not usually get funded find a new source of support that allows them to succeed.

So overall I think the arrangement has little downside and some potential upside. I think the reason Holden probably didn't suggest it himself is that the idea of misusing his power had never crossed his mind. But I'm glad his brother thought of it so that there is one less problem to deal with later.

May I ask why?

The venture folks that I have met (usually through their interst in nonprofit and community work) often seem to be looking for The Next Big Thing or The Bleeding Edge, when I think that often what people need is something a lot less glamorous. The tedious everyday needs of organizations are difficult to fund, but much more necessary. It's not that I'm opposed to innovation, but it needs to be more than new, it needs to be useful.

The question of whether it's profitable is probably of interest to many, but it's not a goal I value in and of itself.

Just think, if it wasn't for the venture capitalist, the very software we use and the other systems that make it possible to communicate on the Internet just might not have been developed as they were.  And yes, profits are of interest.
Most of the software I use is open source (with one notable exception, Mac OS, but I am phasing that out) and the Internet was originally created by public (military and academic) interests.  No way would a bunch of profit-motivated corporations have intentionally created such a decentralized network, allowing people to communicate without going through their tollbooths.

Whatever you say.  Of course I'm not talking about creating the Internet. Go ahead and believe that venture capitalist are all bad people who had nothing to do with funding the development of what most of us use on the Internet or the other developments that were made possible because somebody was willing to take a risk and fund.  I got it.

 

 

 

 

 

And you keep thinking that's what I said, If it makes you feel smarter.

Having recently transitioned from several years at the University to one of the area's largest non-governmental employers, I have to say that both in both environments I've have relied very heavily on free, open software and protocols to get things done.  In fact, given my daily reliance on our open source content management system, a custom database put together with open source components including php and postgresql, and firefox and thunderbird for just about all of my communication, my job would be just as easy if I replaced the proprietary components with free alternatives, but damn near impossible without the free, cooperatively-developed ones.  Granted, some of the software I use is in-house, but it was developed by volunteers and like everything else we have, largely financed with capital from our locally-based ownership and small loans from community members. Sure, venture capital has some role in technology development, but it's not the only way to innovate, and furthermore I don't recall anyone here saying or even implying that all venture capitalists "are bad people."

They aren't and that's the point!  :-)

PS: "And I am allergic to the term venture capitalist" = bad like other allergies to my my way of thinking, so one exzageration must deserve another!

 

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