I see this as a pattern in some start up companies. I'm not saying that all venture capital is bad, however the pressure it buys you is directly related to the patience of your investors. I think that the "just get it out the door" mind set kicks in and really bad practices and environments follow.
When under serious pressure, people are told to:
- Work much longer hours
- Skip stuff like writing tests
- Not bother with continuous integration
- Not worry about formal specifications
- Delay re-factoring code until it explodes when anything new is added
- Write documentation 'later'
- Accept punishment for delivering late instead of incentives for delivering early
- Trust that five new programmers on the team will help at the last hour
- A whole lot of other badness
Investor micromanagement (often using CEO's / CTO's as proxies) is also a major issue for many. This is one of the biggest reasons that I avoid VC funded companies that have yet to turn a profit.
Stack Exchange is one of the few exceptions, they seem to have rather patient investors, and was founded by a core of really good people who know what happens when you don't do things correctly the first time.
Still, in my experience, well organized VC funded start up companies that provide positive environments are more the exception than the norm, and I think we're seeing quite a bit of evidence of that here.
On the flip side, you really don't hear people talking about how great their jobs are, just like you don't hear about the millions of uneventful car trips every hour. You just hear about the wrecks.
Also worth noting, 'venture capital' can also mean micro finance in some situations. The pressure doubles when 'investments' come from savings or retirement accounts. This usually also means the company is running on fumes.