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Question, should one talk about potential acquirers - specifically, those you have offers from - at any point during fundraising?
It's almost like he's trying to replicate Paul Graham circa 2004- 2008.
I haven't seen an article yet that breaks any new ground, ie he's still looking for his "blub paradox" article, but all his articles generate discussion.
Just look at his article on AI from yesterday. It didn't really break any new ground in the AI conversation and it got 260+ comments.
Beware, though, that saying things like “our round is closing really fast” when you have no offers usually backfires. Investors talk and will call your bluff. True, but this sort of investor collusion is unethical and only (possibly) legal because private stock isn't regulated in the way that publicly traded stock is. In fact, the whole and only purpose of the VC-funded economy is to take stock strategies that were m…
Earlier quoted context omitted.
Collusion is a pretty big charge. If investors are upfront about the fact that they talk to each other (and, hey, it's right there in the blog post) then investor A calling up investor B to verify he has made an offer to a startup isn't collusion. It's just due diligence. I'm also unclear about the analogous situation in the public markets that you alluded to.
On the public markets, using social sway or inside connections to intentionally up- or downregulate the reputation or market price of another company for personal profit (say, a pump-and-dump scheme) will put you in prison. No question about it; it's unambiguously illegal to do that. You don't get to, for example, spread negative rumors about a company and ruin its reputation because you think you should be able to b…
If you are saying there is some fraudulent behavior involved in one investor calling another investor to fact check a founder's claim, I'm still not seeing it.
IMO, investors tend to be very formulaic. Traction + social proof + impressive team etc. The formula might be a good heuristic, but I think that it misses out on some genuinely good companies.
I don't know Sam, but I really like this experiment he's doing with writing. Lot's of decent articles being written a a high speed. It's almost like he's trying to replicate Paul Graham circa 2004- 2008. I haven't seen an article yet that breaks any new ground, ie he's still looking for his "blub paradox" article, but all his articles generate discussion. Just look at his article on AI from yesterday. It didn't reall…
I particularly liked the opener: "Without thinking much I said ________, but having thought about that a bit more, I think it’s probably right."
Earlier quoted context omitted.
On the public markets, using social sway or inside connections to intentionally up- or downregulate the reputation or market price of another company for personal profit (say, a pump-and-dump scheme) will put you in prison. No question about it; it's unambiguously illegal to do that. You don't get to, for example, spread negative rumors about a company and ruin its reputation because you think you should be able to b…
It is illegal to give false or misleading statements in order to defraud other investors, but it isn't illegal to "talk your book" if you aren't outright lying about what you are saying. You can flip on CNBC and expect to see lots of hedge fund managers hyping up their positions. That's not fraud. If you are saying there is some fraudulent behavior involved in one investor calling another investor to fact check a fou…
If you want to argue that it's only unethical but not strictly illegal, then fine. I still think we should aim to do better, and it's sad that Silicon Valley doesn't care about better than "not clearly illegal" when it comes to ethics.
> So don’t do obviously dumb things like talk about potential acquirers in a seed round pitch - that will suggest you’re not trying to build a really big company. Question, should one talk about potential acquirers - specifically, those you have offers from - at any point during fundraising?
Take for example Drew Houston turning down the acquisition offer from Jobs/Apple back in the day; probably did wonders for Dropbox's valuation in the following round (and very rightly, if so).