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VCs are scared when they should be greedy

blog.aaronkharris.com

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Re: VCs are scared when they should be greedy

#51

Post by excitom »

blakesterz wrote: post #7
MegaButts wrote: post #3

> In contrast with the scenario in 2000, most of today’s tech companies are real businesses. How many of today's startups are just servicing each other with VC money? This isn't meant to be flippant - I'm genuinely curious (and while I bet it's a lot, I am skeptical it is overwhelming). I mean if we really look at some of the business models for these companies, they're clearly unsustainable. Uber is a prime example…

I was there in 2000, and we all thought those tech companies were real businesses! Most of today’s tech companies don't really look all that much different.

pets.com, webvan, drkoop, kozmo, garden.com ... ah, the memories.

Re: VCs are scared when they should be greedy

#52

Post by moneywoes »

vcfundedmylife wrote: post #21
skippyboxedhero wrote: post #9

Earlier quoted context omitted.

> I think tech investors are unable to see their bias for just how awful most tech companies today are I agree. Ecomm broke first in other markets, and I am seeing profitable ecomm companies still having to raise capital. Uber is one of the worst ones (they took a business that is very profitable, and lost absolutely staggering amounts of money, they probably need to cut 50% of the workforce to start with, and then k…

I agree, crypto and fintech will be the first dominos to fall - they’re in free fall already. There’s a lot of copycat B2B startups that extremely dependent on crypto and fintech for their revenue. They will be the next domino to fall. After that, it would be infrastructure, security, and analytics vendors that will face a revenue crunch and will be unable to raise another round of funding. And then, all the startups…

What can we do to insulate ourselves from this? As a software engineer at a startup

Re: VCs are scared when they should be greedy

#53

Post by elforce002 »

MegaButts wrote: post #3

> In contrast with the scenario in 2000, most of today’s tech companies are real businesses. How many of today's startups are just servicing each other with VC money? This isn't meant to be flippant - I'm genuinely curious (and while I bet it's a lot, I am skeptical it is overwhelming). I mean if we really look at some of the business models for these companies, they're clearly unsustainable. Uber is a prime example…

Uber is the prime example of get out while you're ahead. The founders cashed in and let the the $@#& pile to the rest.

The camel concept is gaining traction since they focus on profitability from the get go, healthy runway and steadily grow.

Re: VCs are scared when they should be greedy

#54

Post by Jommi »

vkou wrote: post #36
missedthecue wrote: post #32

Earlier quoted context omitted.

Boy, this is an evergreen narrative on HN, but I don't really think it's true. The total all-in cost of a Prius (depreciation, maintenance, gasoline, etc...) is about 30 cents per mile. Uber drivers make about $1-$2 per mile which is a pretty big margin. Uber has been around for over 10 years now. Sure, not everyone is an accountant, but if Uber drained every driver's wallet, they'd have noticed by now. Interesting t…

How many uber drivers are in Priuses? I haven't ridden in a single one... How many people do you personally know that make their living as an Uber driver? I don't mean pensioners making beer money, or people doing it as a side job, here. I know one. He's been doing it for a year and half, or so. He doesn't own his car. he has to lease it on a weekly basis, and he's paying through the nose for the privilege. He's doin…

the first sentence is a terrible take unfortunately, prius one of the most popular taxi and ridehailing cars ever, it's sully arund >50% of car supply in most western cities.

As usual, you are conflsting your singular consumer experience of Uber with the global business giant Uber.

Re: VCs are scared when they should be greedy

#55

Post by greedo »

jcmontx wrote: post #33
vcfundedmylife wrote: post #21

Earlier quoted context omitted.

I agree, crypto and fintech will be the first dominos to fall - they’re in free fall already. There’s a lot of copycat B2B startups that extremely dependent on crypto and fintech for their revenue. They will be the next domino to fall. After that, it would be infrastructure, security, and analytics vendors that will face a revenue crunch and will be unable to raise another round of funding. And then, all the startups…

> the final domino would be currently well funded private companies such as Airtable, Notion, Loom, and possibly even Figma How can you make such claims? These are great products

The world is littered with dead companies that had great products.

Re: VCs are scared when they should be greedy

#56

Post by cynusx »

lpolovets wrote: post #22

(Context: I'm a VC) Some great points in the post, but I also see a few additional dynamics at play: 1) The last 10 years have been great for VCs and startups, but now VCs are thinking about how to make their funds last longer. Two reasons for this: first, time diversification matters. If you think markets might go down even more, you don't want to deploy the rest of your fund quickly, you want to spread it out over…

are these US or EU observations?

Re: VCs are scared when they should be greedy

#57

Post by oarsinsync »

bsaul wrote: post #47
ilrwbwrkhv wrote: post #20

A lot of people became "VC"s during the bull run. They brought nothing to the table like YC did. Instead some previously reputable VCs like a16z became crypto grifters. So it's good the market clears a bunch of them so that the YCs and next generation of VCs who actually bring something new to the table come to the forefront.

i've been betting against btc from the beginning, however i truely believe there's something interesting in this field, that may end up getting some real applications sometimes. Now what's still unknown is whether the funds that invested heavily on crypto in 2020s will have enough leftovers once this crisis is over to be a player when the crypto 2.0 era is coming.

> i've been betting against btc from the beginning

Not literally, I assume? Or you’ve got a tiny position and have been (relative to the size if your position) haemorrhaging money for ~13 years? Or successfully rode some down waves? (I’m super jelly if you did the latter)

Re: VCs are scared when they should be greedy

#58

Post by disgruntledphd2 »

jcmontx wrote: post #33
vcfundedmylife wrote: post #21

Earlier quoted context omitted.

I agree, crypto and fintech will be the first dominos to fall - they’re in free fall already. There’s a lot of copycat B2B startups that extremely dependent on crypto and fintech for their revenue. They will be the next domino to fall. After that, it would be infrastructure, security, and analytics vendors that will face a revenue crunch and will be unable to raise another round of funding. And then, all the startups…

> the final domino would be currently well funded private companies such as Airtable, Notion, Loom, and possibly even Figma How can you make such claims? These are great products

That matters in a growth market, only revenue and positive margins matter now.

Re: VCs are scared when they should be greedy

#59

Post by disgruntledphd2 »

moneywoes wrote: post #52
vcfundedmylife wrote: post #21

Earlier quoted context omitted.

I agree, crypto and fintech will be the first dominos to fall - they’re in free fall already. There’s a lot of copycat B2B startups that extremely dependent on crypto and fintech for their revenue. They will be the next domino to fall. After that, it would be infrastructure, security, and analytics vendors that will face a revenue crunch and will be unable to raise another round of funding. And then, all the startups…

What can we do to insulate ourselves from this? As a software engineer at a startup

Hit profitability on a unit cost basis yesterday. Try to hit overall profitability before the VC cash burns out.

Re: VCs are scared when they should be greedy

#60

Post by akharris »

lpolovets wrote: post #22

(Context: I'm a VC) Some great points in the post, but I also see a few additional dynamics at play: 1) The last 10 years have been great for VCs and startups, but now VCs are thinking about how to make their funds last longer. Two reasons for this: first, time diversification matters. If you think markets might go down even more, you don't want to deploy the rest of your fund quickly, you want to spread it out over…

Your second point is the dynamic that makes the least sense to me. In public markets, if a stock is cheaper relative to future earnings, that makes it a better buy. In our corner of the world, the opposite often holds true.

There should be a tipping point where greed beats ego, but have not yet figured out how to find it.

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