Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Venture Capital and Its Discontents

wsj.com

Post reply on HN
Print view View original

1–10 of 30 posts

Re: Venture Capital and Its Discontents

#3

Post by projectramo »

*Just type the title into google and click on it to read the article.

Anyway, the article talks about how this company didn't take VC money, but took money from Indie.vc (backed by traditional VC money).

And then describes the economics which is almost identical to the economics of taking money from a VC firm.

The big difference is the apparent lack of pressure, but that pressure is internal. Its not like the VC forces you to spend money a certain way.

To put it another way, if the advantage of indie.vc is that they don't pressure you, its a difference in management style, not a difference in deal structure.

Re: Venture Capital and Its Discontents

#5

Post by hugs »

btown wrote: post #4

Whenever I see an article about a single company that only quotes its leadership and customers, I'm always reminded of http://paulgraham.com/submarine.html ... Not that this pattern is bad per say, but caveat emptor.

Are you saying a PR firm planted this story?

Re: Venture Capital and Its Discontents

#6

Post by hugs »

projectramo wrote: post #3

*Just type the title into google and click on it to read the article. Anyway, the article talks about how this company didn't take VC money, but took money from Indie.vc (backed by traditional VC money). And then describes the economics which is almost identical to the economics of taking money from a VC firm. The big difference is the apparent lack of pressure, but that pressure is internal. Its not like the VC forc…

But there is a difference in deal structure. If you want to, you can pay back the investment via profit sharing, which is unheard of in traditional seed/early stage VC deals.

(Disclosure: My current company, Tapster Robotics, is one of the first Indie.vc investments. I would have happily remained self-funded/bootstrapped if it wasn't for Indie's alternative deal structure.)

Re: Venture Capital and Its Discontents

#7

Post by projectramo »

hugs wrote: post #6
projectramo wrote: post #3

*Just type the title into google and click on it to read the article. Anyway, the article talks about how this company didn't take VC money, but took money from Indie.vc (backed by traditional VC money). And then describes the economics which is almost identical to the economics of taking money from a VC firm. The big difference is the apparent lack of pressure, but that pressure is internal. Its not like the VC forc…

But there is a difference in deal structure. If you want to, you can pay back the investment via profit sharing, which is unheard of in traditional seed/early stage VC deals. (Disclosure: My current company, Tapster Robotics, is one of the first Indie.vc investments. I would have happily remained self-funded/bootstrapped if it wasn't for Indie's alternative deal structure.)

Wouldn't that be a version of venture debt?

Re: Venture Capital and Its Discontents

#9

Post by onion2k »

projectramo wrote: post #3

*Just type the title into google and click on it to read the article. Anyway, the article talks about how this company didn't take VC money, but took money from Indie.vc (backed by traditional VC money). And then describes the economics which is almost identical to the economics of taking money from a VC firm. The big difference is the apparent lack of pressure, but that pressure is internal. Its not like the VC forc…

Its not like the VC forces you to spend money a certain way.

Unless the terms of the VC dictate you only get access to tranches of money when you hit certain goals (for example, a revenue target will make you do very different things compared to a user acquisition target), or the VC will only co-invest with an established investor who has industry experience so you can't be really disruptive, or the money comes with a requirement that the VC company gets a seat on the board. And so on.

VC money often has very controlling strings attached.

Post reply on HN