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VC isn't VC anymore

anildash.com

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Re: VC isn't VC anymore

#2

Post by palata »

Let's keep praying for fewer and fewer regulations, it's going great!

I didn't know that VCs were ever "not cancer", I've always known them like that. Also my experience with startups is that it is a big scam for employees, but I understand it's not always the case (maybe it depends on where in the world?). I have been an early employee in multiple startups that got the founders rich, and what I got from the stocks didn't compensate for the low salary while working there.

Do I understand correctly that when VCs invest, they dilute the employees and somehow the founders can get away without being diluted? That's the only way I could explain the difference between what the employees get and what the founders get if the startup is successful.

And young people are super excited to work in startups because of old stories like "early employees at Google/Facebook became rich", I guess.

Re: VC isn't VC anymore

#3

Post by cratermoon »

palata wrote: post #2

Let's keep praying for fewer and fewer regulations, it's going great! I didn't know that VCs were ever "not cancer", I've always known them like that. Also my experience with startups is that it is a big scam for employees, but I understand it's not always the case (maybe it depends on where in the world?). I have been an early employee in multiple startups that got the founders rich, and what I got from the stocks d…

Startups define different classes of stock. The class A shareholders are the founders and investors. Everyone else gets class B shares. The A class shares don't get diluted, and they are inherently worth more anyway.

Re: VC isn't VC anymore

#4

Post by palata »

cratermoon wrote: post #3
palata wrote: post #2

Let's keep praying for fewer and fewer regulations, it's going great! I didn't know that VCs were ever "not cancer", I've always known them like that. Also my experience with startups is that it is a big scam for employees, but I understand it's not always the case (maybe it depends on where in the world?). I have been an early employee in multiple startups that got the founders rich, and what I got from the stocks d…

Startups define different classes of stock. The class A shareholders are the founders and investors. Everyone else gets class B shares. The A class shares don't get diluted, and they are inherently worth more anyway.

So fundamentally, "everyone else" is scammed. Unless the class A scammers get so, so rich that everyone else gets rich as well. In which case it's still a scam, but the "everyone else" are happy anyway.

Re: VC isn't VC anymore

#6

Post by lstodd »

RicoElectrico wrote: post #5

Likewise, stock market IPOs are a parody now - not means of getting financing, but dumping the paper on the retail after for the insiders and VCs to realize their gains.

But serioslly when IPOs were not a sad joke? In early 1990s? But I think never.

Re: VC isn't VC anymore

#7

Post by swozey »

lstodd wrote: post #6
RicoElectrico wrote: post #5

Likewise, stock market IPOs are a parody now - not means of getting financing, but dumping the paper on the retail after for the insiders and VCs to realize their gains.

But serioslly when IPOs were not a sad joke? In early 1990s? But I think never.

In my ~20 year career half of which were well funded startups I made it to one IPO (multiple sole proprietor sales) with a bigcorp and my prize was having 3 years to buy my stock options at the IPO day strike-price, which was higher than the stock ever was in my last 2-3 years there.

In the end I made my million(th) sitting behind a cubicle collecting 401k which none of those startups gave me.

Re: VC isn't VC anymore

#8

Post by Analemma_ »

RicoElectrico wrote: post #5

Likewise, stock market IPOs are a parody now - not means of getting financing, but dumping the paper on the retail after for the insiders and VCs to realize their gains.

Yes, it's downright stupid to buy into any tech IPO these days. The fundraising and all the growth were done by the A-M rounds, while the IPO is the bag-dump for the last few rounds of investors. Stay far away.
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