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VCs aren’t your friends

openvc.app

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Re: VCs aren’t your friends

#211

Post by llamaimperative »

MichaelZuo wrote: post #146
kabouseng wrote: post #96

Earlier quoted context omitted.

VC's don't have the ability to distinguish between genius and super genius...

The competent ones can.

That is a ridiculous claim belied by the distribution of positive outcomes in VC. Any VC making this claim with any confidence is immediately dismissible IMO. I would literally never speak to that person again.

Like in all fields, true competence comes with a deep skepticism of one’s own capabilities. Especially in a field absolutely chock full of luck, uncontrollable variables, motivated reasoning, and outright deception.

Re: VCs aren’t your friends

#213

Post by leashless »

jerrygenser wrote: post #182
leashless wrote: post #154

Earlier quoted context omitted.

Paul Graham, Black Swan Farming: https://paulgraham.com/swan.html > "The two most important things to understand about startup investing, as a business, are (1) that effectively all the returns are concentrated in a few big winners, and (2) that the best ideas look initially like bad ideas." _initially look like bad ideas_ meaning "we can't pick them out of the crowd of other bad ideas" > "there is probably at most o…

> So it's not like this model is alien to Our Kind Hosts at YC. They understand that this is a crap shoot with a slightly tilted table, but they're optimising for staying out of the zones where everybody else is betting and not that much more. Do you think this still applies, given recent waves of following the crowd in the last few years like crypto, and now AI? It seems that YC is actually in exactly the same hype…

I'm too far away to know: based in London, mostly working in the legaltech domain, we're far far away from the SV cultural nexus (other than occasional trips to Burning Man for a refresher!)

I think there's a pretty good chance that as their original team is further and further from the operation that they're "reverting to the mean" but I have no evidence.

Re: VCs aren’t your friends

#214

Post by throwaway42668 »

shawabawa3 wrote: post #164
earnesti wrote: post #23

Earlier quoted context omitted.

The deck from March says that they have been sending the deck around since March, and are still looking for investments. It might be meaningful, but would have to measure how quickly the typical funding rounds are made for successful companies, to have an "academic" argument about it. However it doesn't really matter, a VC can invest for whatever reasons he wants.

Also the fact they haven't updated their deck in April/May means they didn't have any huge growth in march/april/may to brag about, or even they had bad march/april/may results that they want to hide

Whatever the reason. The VC objection is nonsense of the fortune cookie wisdom variety. We (venture backed founders) tolerate it because we need the inane spiritual blessings of these dubious kingmakers to make our world go around. So we smile, nod, grit our teeth, and move on to the next one. But none of them are secret geniuses with a unique skill to predict the future based on random made up nonsensical “signals”.

They’re herd animals where survivorship bias has a reinforcing function until a point where being luckiest longest makes it possible to put a finger on the scale of outcomes to make raising subsequent funds easier, makes it possible to set the trend the herd follows, and makes it possible to somewhat curate outcomes (“soft landings” instead of insolvency) for your portfolio.

Every single unicorn and/or significantly exited startup has a pile of VC rejections that’s miles high. The trick as the founder is to just figure out how to find better aligned investors. Typically ones who aren’t high on the ego trip of being an accidental kingmaker. Take the “feedback” like that of the VC in the post for what it is… complete nonsense from someone who’s accidentally successful enough to get away with such a silly criteria because nobody wants to insult the cult clergy to their face in case you might need their blessings at some point yourself… and move on.

Successfully raising money is first an exercise in qualifying who the right investors/funds are for what you’re doing as a venture and second it’s an exercise in number of shots on goal you can make in as short a period as possible until you find one, “Yes”. Full stop.

Re: VCs aren’t your friends

#215

Post by airstrike »

Pro-tip: when I was in M&A, I would always write the season rather than the month on the cover of materials sent to prospective buyers. "Spring 2024" sidesteps the issue entirely and the deck even survives being forwarded around for a few months.

Re: VCs aren’t your friends

#216

Post by cajunboi34213 »

drdrek wrote: post #179
cajunboi34213 wrote: post #162

In my experience founders that have raised vc regard them as bankers. Founders who haven't successfully raised (for whatever reason) and people that dream about being founders postulate on these things. Funding is simple. Seed or before you/team are fundable, based on some signal of you've done it or can do it. Post seed, it's not you, it's the business. If in 2 months you haven't gotten interest or intros, you're bu…

Bankers with good PR. But for the first time founders out there please don't sweat it if you can't get funded for a long time, you may just be early. I gave up on a great idea (that my partner later worked into a great product within an existing company) because we were unable to get funded for 3 months. And later got VC funded after working on a worse idea for a year. It can take time, It may require you to get cust…

first time founders that have large followings in the community they are building for are the most fundable. Reason being, your first product or iteration will fail, but if you have a captive audience willing to try and give you feedback you're in the best position to achieve product market fit.

Re: VCs aren’t your friends

#217

Post by threeseed »

timemct wrote: post #204
threeseed wrote: post #81

Earlier quoted context omitted.

> Your SaaS can probably be built with your daytime developer salary Sure. But from experience it takes 3x as long. After a long day of coding it’s not fun to come home and do another 8 hours.

Even if you love what you do at your day job... The cobbler's kids go without shoes, and the chef's fridge is full of condiments & takeout boxes.

The first thing to go is your social life closely followed by your health.

Bootstrapping is in my opinion much harder than VC backed.

Re: VCs aren’t your friends

#218

Post by bombcar »

benreesman wrote: post #197
openrisk wrote: post #191

In transactional financial markets "friends" is not the right word, but there is something to be said about more or less effective alignment of interests and that is purely a matter of design. There is more than enough money sloshing around, it all boils down to designing contracts and suitable information exchanges between parties. So anybody thinking that the current system is sub-obtimal can try their hand at disr…

Financial accountants have a line item for not being a dick. It’s called “goodwill”. No shit.

Goodwill is like dark matter; they have to account for value increases or decreases when doing double entry bookkeeping so they invented goodwill for that.

Re: VCs aren’t your friends

#219

Post by naltroc »

threeseed wrote: post #217
timemct wrote: post #204

Earlier quoted context omitted.

Even if you love what you do at your day job... The cobbler's kids go without shoes, and the chef's fridge is full of condiments & takeout boxes.

The first thing to go is your social life closely followed by your health. Bootstrapping is in my opinion much harder than VC backed.

The constant feeling of small wins keeps you going

When you finally take 1 day a month off and look down from 10,000 feet up

The reality of how things are going is gloomy

It might also help if you can mentally spin things to be more boomy. Optimists in the house

Re: VCs aren’t your friends

#220

Post by benreesman »

bombcar wrote: post #218
benreesman wrote: post #197

Earlier quoted context omitted.

Financial accountants have a line item for not being a dick. It’s called “goodwill”. No shit.

Goodwill is like dark matter; they have to account for value increases or decreases when doing double entry bookkeeping so they invented goodwill for that.

The trivial necessity of valuing the intangible of being well-liked by one’s customers and partners has nothing to do with positing definitionally unobservable mass.

The cost and effort and intellectual integrity burnt on linking that mass to bosonic super partners even after a six sigma result at CERN on scalar field excitation at 125 GeV was found exactly as everyone knew it would be without a squark in sight is very on brand for what passes as rigor around here these days.

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