Venture capital has a self-dealing problem
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Re: Venture capital has a self-dealing problem
#2I can't believe the folks who disagreed with you are hand-waving away a huge conflict of interest.
Re: Venture capital has a self-dealing problem
#3I can't believe the folks who disagreed with you are hand-waving away a huge conflict of interest.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
~Upton Sinclair
Re: Venture capital has a self-dealing problem
#4I can't believe the folks who disagreed with you are hand-waving away a huge conflict of interest.
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Re: Venture capital has a self-dealing problem
#5Venture capital isn't a game you can "win." The goal is to get a return on investment, not to fairly distribute money. Starting a company isn't a contest like american idol.
Re: Venture capital has a self-dealing problem
#6Two differing thoughts:
I'm not sure I would think the LPs would be all that concerned with this. After all, a VC firm is going to live and die by its performance reputation, so if their funds fail to return gains, it will haunt their firm for a long time.
What I do buy though is Kevin's other point in the conflict of interest of potential entrepreneurs walking into VC offices and pitching a great product (editing out the word "idea" for clarity) that gets rejected. At that point you've given up a lot of information with little recourse, and having a partner at a firm run with the idea themselves, with strong funding and a powerful network, would pretty much be a death sentence.
I have never seen this happen myself (although I do confess Seattle can be pretty far removed from the daily dealings in VC world), and I do choose to believe that most VCs operate with a moral compass, but it's still a terrifying thought.
Re: Venture capital has a self-dealing problem
#7Two differing thoughts: I'm not sure I would think the LPs would be all that concerned with this. After all, a VC firm is going to live and die by its performance reputation, so if their funds fail to return gains, it will haunt their firm for a long time. What I do buy though is Kevin's other point in the conflict of interest of potential entrepreneurs walking into VC offices and pitching a great product (editing ou…
It shouldn't be frightening. It should tell us all what we already know - ideas are worth exactly nothing and execution is worth everything.
Re: Venture capital has a self-dealing problem
#8Two differing thoughts: I'm not sure I would think the LPs would be all that concerned with this. After all, a VC firm is going to live and die by its performance reputation, so if their funds fail to return gains, it will haunt their firm for a long time. What I do buy though is Kevin's other point in the conflict of interest of potential entrepreneurs walking into VC offices and pitching a great product (editing ou…
It shouldn't be frightening. It should tell us all what we already know - ideas are worth exactly nothing and execution is worth everything.
Generally I agree, but an entrepreneur who walks into a VC pitch with execution at least partially accomplished should feel confident they're not going to get their idea stolen.
Re: Venture capital has a self-dealing problem
#9Earlier quoted context omitted.
It shouldn't be frightening. It should tell us all what we already know - ideas are worth exactly nothing and execution is worth everything.
Generally I agree, but an entrepreneur who walks into a VC pitch with execution at least partially accomplished should feel confident they're not going to get their idea stolen.
If you don't have enough execution under your belt that you have to worry about your idea being stolen, you aren't in a good position to be pitching VCs. That worry is a sign you should bootstrap more.
Your value proposition as a founder should never be as minimal as "It's my idea".
Re: Venture capital has a self-dealing problem
#10Two differing thoughts: I'm not sure I would think the LPs would be all that concerned with this. After all, a VC firm is going to live and die by its performance reputation, so if their funds fail to return gains, it will haunt their firm for a long time. What I do buy though is Kevin's other point in the conflict of interest of potential entrepreneurs walking into VC offices and pitching a great product (editing ou…
It shouldn't be frightening. It should tell us all what we already know - ideas are worth exactly nothing and execution is worth everything.
Some companies pitching to Andreessen Horowitz et al. are a bit more than an "idea". None of them are likely to be labouring under the delusion that everything they say in that room is an absolute secret, but there's a big difference between some general idea of the direction of your growth filtering down to that VC's portfolio companies in the same space on the one hand, and on the other, a partner peppering you with questions about your business plan and then opting to found and fund their own "stealth" startup in that space instead...