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VC isn't VC anymore

anildash.com

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Re: VC isn't VC anymore

#101

Post by lotsofpulp »

bix6 wrote: post #95
quaintdev wrote: post #91

Earlier quoted context omitted.

Sometimes I wonder if people will one day wake up and just ditch all the tech. That's seems to be the only way to be out of this mess.

yes but there is helpful tech! We’re just over focused on SaaS and now AI (new SaaS). I do find myself enjoying my computer / phone less these days though.

I find it very useful to be able to look up information at a moment's notice, whether or not a store has something in stock and where it is in the store before I go, doing group chats and video calls with family and friends almost anywhere I am, being able to get a taxi at a known price and see it arrive on a map, etc.

I just had a medical emergency in a foreign country and was able to navigate it with relative ease and almost no cost using translation features. I was able to scan and OCR documents with my phone camera which let me easily submit insurance claims, yada yada, a lot of things are much easier and cheaper in this day and age.

I stay away from the "news" websites (ironic given this site is called Hacker News, but it's not as monetized, so I guess it still works) and instagram/tiktok/youtube shorts/x style stuff.

Re: VC isn't VC anymore

#102

Post by cyberax »

bix6 wrote: post #25

I’m a VC and agree with much of this. The mega firms have totally warped VC and the desire for massive cash appreciation has led to a host of bad characters getting involved. I still love working with early stage companies but it is hard to cut your own lane when these mega groups control so many aspects of the stack and have such outsized capital and political influence. There are so many issues destroying early sta…

I'm in a startup, and we are (somewhat lazily) trying to do Series A fundraising. We _are_ a company that has AI as a part of our app, but not an LLM company.

The advice from our early investors was to basically overhype ourselves, telling that we can transform the world overnight. And also to remove any mentions of our _actual_ product that has real paying users because it can muddy the grand vision.

Another hot thing in the startup world is what I'm calling the "vibe income". It's potential income from a signed MOU or contingent on the success of some trial. So we have to compete with companies saying that they're already having $500k in "income" after just a few months. We naïvely thought that our GAAP income is more important.

I have really bad feelings about this whole situation.

Re: VC isn't VC anymore

#103

Post by keeda »

aliasxneo wrote: post #28

I've been in an interesting spot the last few months. I've pitched probably two dozen or so VCs and, and while almost every case showed interest, it was quickly followed by "rules" and "desires" that were antithetical to the product. The product I am building is a decentralized trust system. The word "trust" is literally in the name. It requires very specific decisions and a very specific organizational and legal str…

I think the problem is that decentralization is almost by definition antithetical to the ability to capitalize on something. As you indicated, decentralization means diffusion of control and power, which are essential to capitalize on that thing. Why would a VC or any capitalist invest money if they cannot see a way to earn back multiples?

Sure you could make some money, but nowhere near the monopoly profits everyone is seeking. A decentralized Google would never be as profitable as a centralized one, so where would a capitalist prefer putting their money?

IMO this is also why decentralized systems or peer-to-peer applications never really caught on. Some point to technical challenges or usability issues or a lack of use-cases, but I believe all of those could have been overcome with enough investment. There just wasn't enough money in them compared to centralization. (It didn't help that the only really popular systems were almost entirely used for illegal or unproductive purposes.)

And these dynamics over time are what have led to the asymmetric Internet today. The Internet was supposed to be equal, with each node capable of being a client and a server and, heck, even a router. But that's clearly not what we have today: networks hostile to P2P connectivity, increasingly powerful centralized services, and decreasingly capable end-user devices.

Re: VC isn't VC anymore

#104

Post by BeetleB »

palata wrote: post #92
sershe wrote: post #85

Earlier quoted context omitted.

Why is that a scam? Nobody ever promises you any specific valuation or fraction of the company. When I joined a company relatively late but well before IPO, some funny number of shares at 12 cents or whatever each did not even enter my calculation any more than "oh and they also give me a free lottery ticket". In my case depending on when one sold after IPO they would have been in the range centered around about comp…

> Nobody ever promises you any specific valuation or fraction of the company Would you mind asking before saying what I have been promised? Also it feels like you have never been in a startup. The whole language of growth everywhere, the "billion-dollar startup", the "becoming a unicorn", this is all suggesting that "you're part of it and it matters to you if it becomes a unicorn". But it doesn't, really. Because you…

> But it doesn't, really. Because you get diluted.

At this day and age, if you don't understand dilution before you join, it's entirely on you.

This isn't a new concept - it was the case decades ago. Even when I left school over 15 years ago, the standard advice when trying to get a job with a startup was "Get a good salary and value the equity at zero."

And class A vs class B isn't even a rich vs everyone else thing. I have class A shares in an LLC, where even the (richer) founders are class B. The operating agreement is that we class A folks are "guaranteed" a fixed rate of return on our investment, and the class B folks don't get anything unless we get at least that rate of return. This is very normal in that industry.

Re: VC isn't VC anymore

#105

Post by theendisney »

quaintdev wrote: post #91
bix6 wrote: post #25

I’m a VC and agree with much of this. The mega firms have totally warped VC and the desire for massive cash appreciation has led to a host of bad characters getting involved. I still love working with early stage companies but it is hard to cut your own lane when these mega groups control so many aspects of the stack and have such outsized capital and political influence. There are so many issues destroying early sta…

Sometimes I wonder if people will one day wake up and just ditch all the tech. That's seems to be the only way to be out of this mess.

I know milenimals who know how everything works but only check messages every 2 weeks and dont answer if anyone calls. Might play a game once per month, might watch one movie per week.

One guy boots up his pc, looks at one website, closes the tab, closes the browser, shuts down the pc and switches the monitor off. I have to admit the technology looks terrible if used like that.

Re: VC isn't VC anymore

#106

Post by BeetleB »

fhub wrote: post #39

I was living in SF Bay Area when a16z started. They had good marketing and a good reputation. Their analyst posts were insightful and well received here. My perception of a16z has changed drastically. I’m ashamed just how badly that marketing worked on me in the early years.

Indeed. I was once an Andreesen fan (many years ago). I've been trying to like him despite all the negatives for many years, but reading this I just can't any more.

Re: VC isn't VC anymore

#107

Post by baron3dl »

r_lee wrote: post #77
bluefirebrand wrote: post #70

Earlier quoted context omitted.

Elon Musk was already minted the worlds first trillionaire back in June wasn't he? Pretty insane from 100 billion in 2020 to 1 trillion in 2026. Not a sign of a supremely broken system at all

yup. how are you ever supposed to compete with that capital moat? and I'm not an Elon hater, I just don't see how this system can be sustained

it's easy, just eat cake.

Re: VC isn't VC anymore

#108

Post by WhatsTheBigIdea »

euio757 wrote: post #89

> Those firms also stop legally even being venture capital firms We need an equivalent of the "Fiduciary" word for financial advisors ... but applied to VCs. "Are you an Artisanal, Free-Range, Fair-Trade™ VC?"

VC General Partners (managers of the VC fund) are already fiduciaries with responsibility to the fund's Limited Partners (people and institutions which invest in VCs). Their fiduciary responsibility is to maximize return on investment.

Re: VC isn't VC anymore

#109

Post by lotsofpulp »

anildash wrote: post #86
bix6 wrote: post #25

I’m a VC and agree with much of this. The mega firms have totally warped VC and the desire for massive cash appreciation has led to a host of bad characters getting involved. I still love working with early stage companies but it is hard to cut your own lane when these mega groups control so many aspects of the stack and have such outsized capital and political influence. There are so many issues destroying early sta…

I think “regular” VCs are one of the cohorts of people I feel worst for! I have a lot of friends who got into the business wanting to help entrepreneurs, and now they’re stuck on a cap table with folks who they’d never want to do business with. It’s not any different than the founders or employees who don’t want to be saddled with these guys, either. The hard part is figuring out how to change these structures so tha…

I think the root problem is it takes a lot more money and resources to compete now than it did before. Before, due to broadband being new, everyone not already having high performance computing devices, and the quickly decreasing costs of hardware, it was possible to use a skeleton crew and barebones resources to do something impactful. Or you have to be a very, very exceptional performer.

bix6 alludes to it another comment:

https://news.ycombinator.com/item?id=49554814

Re: VC isn't VC anymore

#110

Post by yru76 »

quaintdev wrote: post #91
bix6 wrote: post #25

I’m a VC and agree with much of this. The mega firms have totally warped VC and the desire for massive cash appreciation has led to a host of bad characters getting involved. I still love working with early stage companies but it is hard to cut your own lane when these mega groups control so many aspects of the stack and have such outsized capital and political influence. There are so many issues destroying early sta…

Sometimes I wonder if people will one day wake up and just ditch all the tech. That's seems to be the only way to be out of this mess.

That's like waiting for domesticated animals to walk of the farm by themselves. Mess resolves itself the same way throughout history when different camps within the elite start saying enough. But there is a process just like abolishing slavery or getting kings to hand over money printing to the central bank. Wasn't driven by the plebs. It takes time because the different camps have to align. The parasites get reigned in eventually because they are in the minority camp.
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