The latest issue of Business Week contains this story about AzoogleAds and other firms whose founders are cashing out with venture money.

These days private equity firms are using their wads of cash to buy entrepreneurs' stock before their companies reach Wall Street. In the past five months at least eight private Internet advertising and marketing companies have completed financing rounds in which founders sold shares to such investors for millions.

I am not the only person who thinks the venture capitalists who finance such buyouts are nuts.

Steven Eskenazi, a general partner at San Francisco's WaldenVC, calls the sales of founders' shares a "very disturbing and negative trend." For one thing, founders may have little incentive to stick around after getting their windfall. "If times get tough and they have a disagreement with their board, they're going to go to the beach," Eskenazi says. In addition, if founders sell before an IPO or acquisition, it could raise questions about their confidence in the future of their companies.

For a company where this sort of financing may have had a negative effect on the IPO pricing and subsequent market performance, Business Week cites Fastclick, though that is a company with other problems.

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