Venture Capitalists, who are these freaks?

by openfly • 16 years ago

38 13 16 years ago

As time goes by, we need angel investments for fewer and fewer startups. The cost more often is within the reach of founders own (or parent's and friend's) pockets. People like me need business savvy advisers more than money. Investors who bring only money to the table get less useful every year.

braindead_in• 16 years ago

Only for web startups I would say. Things are very different in hard, enterprise software business.

adaugelli• 16 years ago

Still for most startups - though outside the realm of this board - cleantech, life sciences, and enterprise hardware startups still require major VC and PE backing over their life cycle.

For example - Better Place - a provider of Electric Car Service Stations just raised a $350 MM Series B with HSBC as the lead investor. HSBC doesn't bring management expertise - but they did bring $150 MM of investor dollars.

lsc2• 16 years ago

I think the bit you are missing about business advice is that what constitutes good advice varies a lot based on the size and ownership structure of a company.

If you are a 2 man bootstrapped company and you take advice from someone running a fortune-500 corp, you are probably getting horrible advice.

Really, if you don't need investor money, you are probably too small to benefit from most investor advice.

grellas• 16 years ago

"Venture Capitalists, who are these freaks?"

Answer: These are the freaks who took a nascent computer industry once dominated by a few mega-companies and, beginning some 40 years ago, made possible something that we today know as a "startup" by which young and otherwise untested whippersnappers might avail themselves of their capital in order to build vast new enterprises that have managed to transform all of world commerce and who, with their capital, built such a tremendous infrastructure in what we know today as the internet that young and untested whippersnappers can presume to launch new ventures under the illusion that no capital of any kind is required or, if it is, it can be so minimal as to come solely from a few friends or family members. These freaks are really nobodies in the grander scheme now that we have moved into an era where risk capital is no longer required to launch and build startups and where every young and untested whippersnapper will be more than willing to put up that $100K or $200K of his own money to take that whirl with some new and untested concept to see if it will fly. And if that young and untested whippersnapper should lose his money in taking that whirl, it is really no loss because only soulless people care when they lose money while those who are above mere money are too busy having fun.

I'm sorry - I would hardly classify myself as a sycophant for venture capitalists or other investors (my specialty is representing founders and their early-stage companies) but this piece is really beyond the pale. Freaks? Soulless? This really is pure garbage, whatever good points are otherwise hidden within the broad ideas that founders can and do benefit from managing their talents and resources wisely so as to lessen or avoid dilutive hits from taking in investment money unwisely. Whatever might be good here is, for me, lost among what I see as a mean-spiritedness in the presentation.

ilcesco• 16 years ago

VCs are good to share risks and gain economic stability while building something on your own. I wouldn't drop out my day job to sink into a project and risk all my money, I must be backed in order to start. What you need is experienced, advising, business savvy VCs. They're a necessity, not Freaks. The article is bogus.

ableal• 16 years ago

> I see as a mean-spiritedness

Let me offer an outside perspective. I see VCs in a role similar to horse breeders - they pick a few foals, groom them, and are quite dispassionate about pushing ahead the winners and disposing of the others.

Can't quite blame the young bucks for some kicking and biting when a strange-smelling outsider approaches them with a rope and saddle.

(shouldn't have watched all those westerns ...)

hga• 16 years ago

Great screed; two quibbles:

Venture capital in 1957 was necessary for the founding of one of those "mega-companies" that was in fact quite small, scrappy and supported a lot of downstream innovations with their affordable and sane computers through at least the '70s (DEC).

I come from a background that includes working at and around a number of startups that could never have followed the current "micro investment" model and I'm quite unhappy about the ending of conventional VC as we know it.

"We aren't inventing the future anymore", i.e. no new microprocessor macroarchitectures, no new weird fun thinks like FPGAs, just endless variations on today's lowest level and most expensive to establish technical foundations, improved by sustaining innovation but very little disruptive.

_delirium• 16 years ago

I assume good ones know the culture well enough to avoid doing so, but there are people who show up to hackathons with pretty thinly diguised interest in scoping out investments. It can be weird when people are purely talking tech and side-projects and whatnot, and one guy is sort of hovering around conversations out of business interest. Though, to be fair, it's quite possible the most obvious ones are would-be VCs and angels rather than actual ones.

edit: comic http://www.flickr.com/photos/progrium/2126533900/

lsc2• 16 years ago

eh, I guess I don't really mind them hanging out, I mean, I'm not interested in what they have, but others are. My problem is that they seem to have the attitude that everyone wants to talk to them.

Having angels at hackathons is fine, maybe even good. The problem is when angels become (or act as if they are) the centre of hackathons.

I remember not so long ago I was at a kinda business oriented hackathon and I couldn't get this angel to leave me alone. I mean, okay, I talked at first, but after realising that he was only interested in something that would sound good on CNN (which is to say, he wasn't interested in anything realistic, or at least nothing realistic that I was capable of doing) I lost interest.

It was like trying to talk to someone who was stoned. He said things that sounded deep, like they were 'big ideas' but if you pinned him down and dug into the details, there was no actual content.

The guy wouldn't leave me alone, even though I was being fairly direct about "not interested, working" both verbally and non-verbally. It didn't help that my partner liked talking to the guy, I assume because of the money.

Really, if the guy wanted to sit behind me and watch, that'd have been fine. It was the talking to me, /after/ I made it clear I wasn't interested in talking to him that bothered me.

anamax• 16 years ago

> It was the talking to me, /after/ I made it clear I wasn't interested in talking to him that bothered me.

You should have charged him. Or insisted on a term sheet before you started talking.

ergo98• 16 years ago

Can also be read as: "VCs and angels, please notice me!"

Also: "I was there!"

joshu• 16 years ago

I wonder if this is like that thing where you insult people to get them to talk to you.

Venture Capitalists, who are these freaks?

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