It used to be that being a venture capitalist meant playing bad-cop and tightening up a sloppy company. Today the smartest VCs recognize that the rules have changed and they face an unprecedented opportunity to help the world innovate.
Spend some time with business owners who have taken venture capital money and it won’t be long before you start to hear the horror stories: lack of control, loss of vision, tightening of budgets and firing friends appear to be just the tip of the VC iceberg. One wonders why any company that wants to protect the crew that made it great would ever consider taking money from a VC.

Given what we’ve been through recently, the less than prophetic words of Michael Douglas’s Gordon Gekko’s character — a caricature of a venture capitalist — may make you think that VCs are the last thing the world needs to make innovation happen.

But hold on, the tide is changing. It used to be that being a VC meant setting a new course and tightening up a sloppy ship. But that was yesterday. Today the smartest VCs recognize that the rules have changed and they face an unprecedented opportunity to help the world innovate.

From our experience, here are three things VCs are looking for today and why they may be a good fit for you:

> Disrupters. Companies that are reinventing the rules. Companies that can produce a result through a product or service that is dramatically more effective or cheaper than their peers.

Often times, these companies have gone so far off the course set by their peers that they are laughed at by the competitive set. It sometimes takes a group of objective thinkers, completely “Outside the Jar” to recognize that they are on to something. All they need is for someone to believe in them when their banker won’t.

> Pay for performance cultures. Growth guru Verne Harnish, founder of Young Entrepreneurs’ Organization and CEO of Gazelles has coached thousands of companies about the power of attaching key metrics to monthly performance. This open-book mentality was unheard of two decades ago but today is empowering growing companies to build cultures of accountability — an extreme competitive advantage.

In March, the BusinessWeek 50 pointed to Nucor, IntercontinentalExchange, Fastenal (No. 19) and Expeditors International of Washington (No. 28) as examples of how accountability drives companies to the top of their class.

VCs are happy to pay for performance–it is the basis of their business model. So if I was a VC for a day, I’d be looking for companies that keep their books open. I’d never have to worry about my money because everyone in the company would be watching it like it was their own.

 > Failing Forward. To be an innovator you must be prepared to fail often. Companies that have demonstrated the tenacity and skill it takes to make small bets on many failures and then invest on the idea that works are where I would put my money. The fact is that as soon as your idea hits the market, someone will be copying it. So a company must be constantly innovating to stay ahead of the curve.

VCs are beginning to recognize that this pattern of fail, learn, fail, learn, succeed — launch!, is critical to succeeding. It is also expensive. Many times their money can be the fuel it takes to increase the cycle time, helping companies get to successful launch much more quickly.

While the days of Gordon Gekko are hopefully behind us, let’s not give up on VCs just yet. This innovator believes they will be key to making all of our lives better. As ironic as it may seem, they just may save America after all.

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