I like almost everything about Joel's latest article, Fixing Venture Capital.

• I like his discussion of the different risk/reward preferences between founders and VCs.
• I like his hockey-stick graphs of company growth, even though most small ISVs would be delighted if the curve could simply be linear.
• I like his discussion of what happens to a company when things get out of balance.
• I like the way his article characterizes all VCs as ogres, even though not all of them are really that bad.
• I like the fact that what he's actually doing is setting the bar really high for the day when he does decide to get a VC involved in Fog Creek.

The only thing I don't like about this article is the title.  Calling it "Fixing Venture Capital" gives the impression that the VC industry can be fixed. 

Seriously, if I were to paraphrase Joel's article down to three simple imperatives for the VC industry, it looks like this:

1. Tune your risk/reward expectations to be more closely fit the goals of the entrepreneurs.
2. Instead of bonging 99.9% of firms that solicit you for money, go out and find the good ones that are too busy selling products to sell stock.
3. Realize that by screwing the founders you are simply excluding the smartest founders from your deal flow.  Cut it out.

Obviously if more of the VC world worked this way, it would become a heckuva lot more appealing to founders.  However, we have to remember that the venture capitalist is a middleman, with founders downline and limited partners upline.  Just like the entrepreneur, the VC has to keep things in balance.  Making founders happier is great, but if doing so makes the limiteds unhappy, the whole thing will fall apart.

Let's distill Joel's piece down even further to make one single piece of advice for how the VC world should change:

If you would become a lot more patient about liquidity, you could attract much better portfolio companies.

And therein lies the problem.  Asking a VC to be more patient means he in turn will have to ask his limited partners upline to be more patient.  The limiteds don't want to do this.  They've got $100M to invest and they're trying to decide which of two VC firms will manage it for them.  One of those firms is asking for patience.  The other is singing a catchy tune about finding The Next Netscape.  Which firm gets the bucks?

Bottom line:  Joel correctly observes that most VC firms don't have much to offer people who want to build solid, long-lived companies.  Don't expect this situation to change anytime soon.