Three of our worst VC stories

https://twitter.com/eastdakota/status/2062860530360959273

by orgonon • 2 months ago

281 161 2 months ago

twitter.com

https://xcancel.com/eastdakota/status/2062860530360959273

More of these (via https://news.ycombinator.com/item?id=48418641 below):

https://xcancel.com/gregisenberg/status/2061794787825479818 (<-- the OP)

https://xcancel.com/dunkhippo33/status/2062768969560510486

https://xcancel.com/typesfast/status/2062791307094048937

https://xcancel.com/awxjack/status/2062605286683336757

https://xcancel.com/travisk/status/2062224472426365045

https://xcancel.com/mark_cummins/status/2062293061426663612

stevepotter• 2 months ago

All I ever hear are horror stories. Can someone tell me a good story about VC that isn't Facebook or something?

margalabargala• 2 months ago

There are tons and tons of mundane VC stories. They all mostly just go "we came, we presented, we were funded"

vjeux• 2 months ago

Casey Aylward from Accel has been mentioned in all void0 company posts. So she must have been very useful for the founder. (I don't have any insider information about void0, I've met her a few times and she is amazing)

https://voidzero.dev/posts/voidzero-cloudflare#acknowledgeme...

lyyons• 2 months ago

+1 to Casey Aylward being a class act. Super useful and seems to have the magic touch for dev tooling investments.

mitchellh2• 2 months ago

As with all things, the horror stories just get the most attention. People love to rage. There are plenty of boring (good, even!) VCs out there. They just work more quietly, professionally.

I'll share a story, but its about a close friend and not me so I won't name any explicit actors and I'm going to round out the numbers. You either trust me or you don't, but this is a very direct relationship I have to both the founder and VC.

The story is this: the founder started their company outside of SV, so the lawyers weren't super familiar with startups and messed up the initial incorporation and stock plan stuff (actually super common: use Stripe Atlas or pay a startup-aware lawyer!). Went under the radar through years. This company ended up being bought for nearly $1B (with a B) after many rounds and a large board.

During the legal work to close the acquisition, they found out this messed up stock plan. Without going into the details, the effect was that instead of taking home $200M, the founder would take home ~$75M. The mistake the lawyer made almost a decade earlier was about to cost him $125M.

Most of the board basically said "too bad so sad, law is law." But one VC (the one I know, the one I'm talking about) basically strong armed and politicked the whole thing and eventually convinced everyone around the table to give up an equal share of their own holdings to make the founder whole.

Letter to the law: they didn't have to.

Spirit of being founder friendly: this VC went to bat hard and got everyone to yield to make things "right."

Also, look, you might argue $75M vs $200M is just "rich vs rich." Who cares? Sure. That's not the point.

You don't hear about stuff like this because honestly its not a big enough deal and feel good stories get way less clicks than pitchfork stories.

wenbin• 2 months ago

This is awesome!

thadt• 2 months ago

Right - and if I ever go to raise VC then that's a guy I'll want to talk to. Even if they themselves don't invest, their recommendation would be valuable.

Life's too short to screw people over - reputation is one of the few things that last after we're gone.

ChrisMarshallNY• 2 months ago

Thanks for that story.

I feel as if basic Personal Integrity is now considered an anachronistic weakness, in the tech industry, and it's heartbreaking. I know that VCs can probably share similar stories [to the OP] about some of the people that pitched them, or their behavior, after getting funded.

Lotta ass, being shown, all around.

At some point in the future, I may consider smaller-scale (local) angel investing, but it seems like such an ugly field, not sure if I'll ever do it. I don't need the money; I would do it to help folks get a leg up.

throw03172019• 2 months ago

Great story! What was the stock plan mess up that resulted in that?

pilingual• 2 months ago

Could you ask the VC if you could name them in the story?

It's unfortunate that some VCs I respected turned out to repeatedly have their reputation tarnished by such negative stories. I'm not sure what compels founders and VCs to be polarizing and not diplomatic like the old days.

dang9• 2 months ago

This is one for https://news.ycombinator.com/highlights!

(I mention this so more people can know the list exists, and hopefully email hn@ycombinator.com when they see comments we should add.)

__alexs• 2 months ago

I wonder how the LPs in the fund felt when they heard they lost out on this?

burnt-resistor• 2 months ago

PSA: Integrity is worth more than any amount of money. Anyone who doesn't prioritize that and keeping their word isn't worth anything. One appearance of a selfish move is all it takes to ruin reputations. The subset of big ego celebrity VCs whom cheat almost everyone are liabilities to run away screaming from... deal only with honest people because there's never getting a good deal with a viper.

bombcar2• 2 months ago

This is more common than people may realize; I know two cases I was personally involved in where a VC went to bat and “did right” - it’s just not talked about much, as it’s not a terribly interesting story.

Aurornis• 2 months ago

The non-horror stories are usually pretty boring: VC heard the pitch, then either passed politely or wanted to be part of the round. If they joined, they wrote a check and wanted updates.

The VC landscape has changed a lot since some of these stories happened. Many years ago, there were few VCs and even good companies had a hard time getting funding. This created weird environments with some VCs raised funds and then liked having companies crawl to them to beg for the money.

There are still some VCs like that, but there has been an explosion of VC funds and money. Most VCs know they need to work hard to earn the trust of founders that they want to invest in. Leaving a bad impression could mean you're left out of the next round if you want it.

This goes against the popular idea of VCs, but most VCs I've worked with are actually pretty boring, normal, nice people.

trumpdong• 2 months ago

The best possible case is that you get a cash infusion now in exchange for giving up a huge percentage of your future revenue and control of the company.

Hammershaft• 2 months ago

I mean the goal is that the money invested increases the value of the company so that the founder's reduced stake is worth considerably more than the founder's full stake of the counterfactual company where he didn't take VC money. VCs can be strongly positive sum.

joshu2• 2 months ago

i raised twice from USV. class acts all around. too many stories to count, but they always had my back.

sskates• 2 months ago

I believe Eric Vishria is the best Series A board member of this generation. I've learned more from him about it what it means to be a great CEO over the last 10 years than anyone else. I haven't heard of another founder who has spoken as highly as their Series A investor.

I've been meaning to write up my story with him. Now is a great time with all the horror stories on others that have been coming out.

He sticks through his companies for over a decade, which is rare in this business: https://x.com/ericvishria/status/2051459386372149506

troyvit• 2 months ago

Tony Conrad [1] was the VC that guided our related content engine (Sphere: a vector database before vector databases were cool) through a $25 million exit. Chump change these days but he took really good care of us, leading us through a global recession and then two acquisitions.

[1] https://about.me/tonyconrad

maccard• 2 months ago

I was just an engineer at a vc backed startup but our interactions with the VCs were totally normal - they were no better or worse than when we worked with publishers or other external funding sources.

cyberax• 2 months ago

Sure. They are usually just very boring: you made a pitch, got funded. The VCs used their connections to get you good advisors and/or introduce you to prospective clients.

jwatzman• 2 months ago

My prospective co-founders and I were pitching to a VC firm that was, on paper, a really good fit for what we were trying to do. The partner we were pitching to was, 15 years ago, briefly my manager's manager -- some work relationship there, she remembered me and I her, but we didn't work super closely together and it had been a very long time. She had moved on at that company to more big-shot things and ultimately become a partner at a respectable VC firm.

About 10 minutes into the pitch, she cut us off, and basically said -- as absolutely kindly as something like this can be directly said -- "I am not going to invest in this, and furthermore I don't think what you're trying to do is investible at all". Then she took a bunch of her time to run us through why, help us understand some very fundamental things about the VC world we didn't quite have right, and generally be brutal but extremely useful in us framing what we were trying to do.

She didn't have to do that. She could have nodded along and then given us a polite "no" like everyone else. She could have cut us off and given us a rude "no". But she didn't -- she made sure to use the time we had to help us as much as she could, even if she very adamantly was not going to invest.

Not a big gesture or anything, but kind and helpful. There's a lot of that. But it doesn't make headlines.

brianwawok• 2 months ago

It’s a very fine line between being helpful and a jerk. Same story to someone else may have ended up as a bad Twitter story.

emmelaich2• 2 months ago

You might want to listen to the Ron Conway episodes of the https://www.thesocialradars.com/ podcast.

swyx2• 2 months ago

theres always a story behind the story. wondering why he chose today to say these

mitchellh2• 2 months ago

probably just been long enough that he doesn't give a shit

source: most of the bullshit i surface up nowadays

swyx2• 2 months ago

i mean right but even you hold back some stuff because youre a Nice Person yknow? haha

fastball• 2 months ago

Well he did retweet another tweet that kickstarted the convo, very possible he saw that tweet, said to himself "I have some of these to share!" and then proceeded to... do so.

k099• 2 months ago

Greg Isenberg's viral tweet about VC that fell asleep during a pitch kicked off a bunch of other tweets about weird VC experiences this week:

https://x.com/gregisenberg/status/2061794787825479818

Some QTs:

https://x.com/dunkhippo33/status/2062768969560510486

https://x.com/typesfast/status/2062791307094048937

https://x.com/awxjack/status/2062605286683336757

https://x.com/travisk/status/2062224472426365045

https://x.com/mark_cummins/status/2062293061426663612

dang9• 2 months ago

Oh thanks! I'll add these to the toptext.

cowthulhu• 2 months ago

#3 is insane, if for no other reason than the VC is signaling that he’s likely going to try and do the same thing to you some day… even if you were totally willing to screw over your team, why would you ever get involved with that VC given you’ll then have to watch your back until the end of time?

cryzinger• 2 months ago

I think a lot of people fail to recognize that they're the next target, or convince themselves they're special in some way that makes them immune. It's like when someone knowingly participates in an affair and tells themselves "Sure, they're cheating on their current partner to be with me, but after they break things off I know we'll be together forever!"

raverbashing2• 2 months ago

Yup, exactly this

For example, if you go off with the cheating partner, don't expect it to not happen again

CPLX• 2 months ago

Some people really do thrive on this shit though. They know the rules of the game and want to play it. What they’re really thinking is they’ll be better at the game than their opponents.

I mean can you actually imagine the internal monologue of a guy like Sam Altman?

darth_avocado• 2 months ago

Because rich and powerful people also have massive egos to go with their power and money. Some of them will find your rejection a personal attack and try to actively sabotage you. Not all VCs are like that, but there are enough of them that you need to be careful about how you handle the situation.

toxic• 2 months ago

Because if you get involved with most VCs, you will then have to watch your back until the end of time.

None of those "worst experiences" seem all that unusual to me (though nobody will say #1 out loud anymore until after they've invested), and #3 is completely in character for Vinod.

sunjieming• 2 months ago

Yeah, this is par for the course with VC. You should never believe your VC (even post funding) is your friend. They can be a great business partner and resource but they're never your friend under that dynamic

root-parent3• 2 months ago

If one partner is the core of the company, and the others the VC thinks are useless ( I am not saying in this case they were...just that the VC might have that perception) what should the VC do?

After all its just business decisions like Cloudflare recent layoffs no?

https://blog.cloudflare.com/building-for-the-future/

tehwebguy• 2 months ago

omfg that’s the beach access guy

foobarbecue• 2 months ago

ugh. That douchebag doesn't even surf.

wslh• 2 months ago

Sadly, I've experienced this myself, and I'm aware of other people who were cut off from opportunities in similar ways. I applaud the tweet because this is important to say out loud: we are often not living in the world we think we are observing. Many people know this, but few talk about it. It's an open secret.

wheels• 2 months ago

I had the same thing happen (though seed round). I don't think it's uncommon. Also never took another meeting with the guy.

TrackerFF• 2 months ago

My pet theory is that it is more nurture than nature. These (VC) veterans have seen thousands of startups come and go, and become so desensitized to the ruthlessness.

Of course to people like the author, it seems borderline sociopathic to casually suggest such levels of betrayal. It is like trying to get into the most exclusive nightclubs, and when you're finally in the front, the bouncer will look at the group and say "You can get in, but not those two". It sucks, but to the bouncer it is just business as usual, and you're just another face.

lovich• 2 months ago

Nah, he was talking about taking their stock. That’s morally theft even if by some convoluted reason it’s not legally theft.

I get the business as usual analogy but the specifics of the interaction are different. You just showing up to your club with your friends is different than having equity in a company you cofounded.

timdorr• 2 months ago

Vinod is insane. You can hear more of his really bad takes on his recent Sam Harris podcast episode: https://www.samharris.org/podcasts/making-sense-episodes/479...

Quarrelsome• 2 months ago

These VC stories continue to feed my incredulity at how people _that_ incompetent can still be _that_ wealthy.

Is it the money that makes them stupid or smth?

wahnfrieden• 2 months ago

Competence, intelligence, merit have little connection to wealth. Wealth at that level is attained through arguably unfair means, not from reward for hard work. Conversely, poor people are not poor as punishment for lack of intelligence or merit

rwmj• 2 months ago

Why do you think people who lucked into vast riches by being in the right place at the right time would be especially smarter than anyone else?

boelboel• 2 months ago

Getting extreme wealth is more so about luck in various forms than competence/intelligence. If it were just about the latter everyone who's intelligent/competent would be rich. You don't hear about boring wealthy people either.

jaggederest4• 2 months ago

https://en.wikipedia.org/wiki/Affinity_fraud among other factors - being someone who talks right and plays metaphorical ball with the correct people matters more than any amount of intelligence or competence.

itkovian_• 2 months ago

In many cases the GPs are not, at least nowhere near as much as you’d think. Obviously there are power laws here as well. Non partners, forget about it.

The other thing is it is maybe the most nepotistic industry out there. Which somewhat makes sense given the actual job is so relationship based.

AndrewKemendo4• 2 months ago

I could write a book with the horror stories I have of VC and LP behavior, and some of the wild stuff I’ve either been asked to do, verified others were asked to do or say it’s just totally unhinged.

I don’t know if Angel investing groups are really still around like they were in there 2010s but the variance in the types of insanity and weirdness for those groups is really unmatched.

metadat• 2 months ago

Tell us one or two, then!

AndrewKemendo4• 2 months ago

The (fun?) one that stands out the most were the Pittsburgh Angels (2013 probably) and they literally have a long round table that they dine at in a closed off room in this country club. They take like one or two pitches a month and tell you that they generally do 300-500k checks.

I was invited and drove 3 hours. They then put you in a giant dining room with all the country club members eating dinner, with your own table by yourself. They tell you to order whatever you want, and wait there, and when the group is ready you'll be summoned to dance.

Anyway, whenever they are ready which was like an hour and a half, they call you in and you have to be ready.

While they loudly eat dessert you are supposed to walk around this 20' long table pitching them whatever you're doing and then you have to take questions from them, while still walking around a table. No presentation place, no place to sit, no real way to talk with everyone, you're always talking over someone's head.

Then they say thank you and on the way out you get a bill for whatever you ate.

That was one of the "nice" ones. There's tons of bullshit networks like TiE, Keiretsu forum, YoungPresidentsOrganization shit like that are all social clubs for wannabe oligarchs.

I think every Chinese backed firm on sand hill road at the time was a front for Chinese billionaires money laundering, I'm sure I have the giant spreadsheet of funds I talked to from 2016 that later turned out to be almost exactly that like Rothenberg Ventures.

The bad ones are LP's sexually assaulting people and being told to ignore it or that it's no big deal (I didn't ignore it and people got fired). Or when LPs push CEOs to fire more people than they need to, or to raise money through some shady vehicle to get it off the books. Not to mention seeing too many people that later were in the Panama/Epstein files.

Literally horrific

moralestapia• 2 months ago

some of the wild stuff I’ve either been asked to do

Oh man, I'm really sorry you had to go through that :'(.

AndrewKemendo4• 2 months ago

Yeah same, but eye opening no less

mi_lk• 2 months ago

what is the "meeting scheduled on Monday clue"?

joshu2• 2 months ago

partner meeting

camel_gopher• 2 months ago

Next up, one of our worst CEO stories

owenthejumper• 2 months ago

There was once a CEO who built a great company, then decided to fire 20 % of the company and call those people publicly "measurers", so they are basically tainted in the marketplace. Oh wait...that was eastdakota

c2h5oh2• 2 months ago

A CEO got entire 20 man dev team into boardroom and asked everyone to voice any concerns about technical debt, bad development practices, anti patterns as well as project management issues.

The 4 people who spoke up were all fired on the same day 3 or 4 weeks later. 7 more quit shortly after - as soon as they got any decent offer. 6 months later about a quarter of the 20 were still with the company.

youngtaff2• 2 months ago

Which CEO?

giancarlostoro• 2 months ago

The first I heard of Cloudflare was a recommendation from someone who used to DDoS websites (and yes they've been arrested for related crimes, long story), and I thought "what the heck is Cloudflare" then over the coming years, I kept seeing other friends using it. It's really interesting that Cloudflare was able to pop into a market that Akamai could have snagged for themselves or outright tried to buy out Cloudflare.

It's a bit crazy in hindsight that companies would have avoided investing, considering this is a space someone like Akamai occupied, and clearly there is value in this space. It's incredible to see how Cloudflare has grown over the years, kind of happy they grew as much as they did, a bit surprised by some of those VC nightmare scenarios.

jaggederest4• 2 months ago

And as someone who briefly had to interact with Akamai, the deficiencies in their product are not even close to subtle.

raverbashing2• 2 months ago

Sounds like how WeWork ate Regus's lunch even while being made of crazy

youngtaff2• 2 months ago

And yet Akamai is profitable… whereas Cloudflare is not…

snowwrestler• 2 months ago

Cloudflare is fantastic at marketing, and pretty good at technology. I evaluated them twice for enterprise contracts and both times picked a competitor. The first time, it was DosArrest for DDOS protection, which was a much better value per dollar (but they sucked at marketing.) The second time, we needed a CDN with particular features and Fastly was a better fit.

My point is that it’s very very hard to know in advance that a startup is going to be awesome at marketing. Their tech was not, on its own, a giant moat or a “must have” standout. So I can see why some VCs shrugged.

satvikpendem5• 2 months ago

More and more I see why bootstrapping is the way to go. And especially in this SaaSpocalypse with AI companies commoditizing entire companies with new feature releases like Claude Design or Codex for legal, it's better to just run your little corner of the Internet and make sustainable money over hyperscaling with millions and billions and being put out of business the next week.

One might say why bootstrappers won't get erased too but they can carve out a specific market too small for AI companies to want to touch, and still remain sustainable rather than needing to make a ton of money; and pivoting as a venture backed company can be much harder as there are more people to please like investors and your employees which you likely have more of than a bootstrapper.

root-parent3• 2 months ago

> More and more I see why bootstrapping is the way to go.

That does not match the definition of success here...the trick is to become a billionaire and call yourself an entrepreneur without ever turning a profit.... :-)

Then keep getting acquired, become a VC, do the same on and on.

Clouflare is an example as a loss making company, every single Musk company with the exception of his state subsided Tesla, Epic Games, Snap, DoorDash, WeWork, Rivian, Lucid, Peloton, Roblox, Wayfair, Lyft, Reddit, ...

Being a real business, and turning a profit, is very, very hard, you have Google, Amazon and a infinitesimal few...

satvikpendem5• 2 months ago

Seems people downvoting don't understand your sardonicism lol

jviotti• 2 months ago

This. Here is my bootstrapped niche corner of the internet: https://www.sourcemeta.com

satvikpendem5• 2 months ago

Nice, how's the revenue/profit? Seems hard to monetize.

fg137• 2 months ago

Did the author edit the tweet/post or am I crazy? There are only two stories

bagels• 2 months ago

For some reason they're not threaded on the twitter link, but you can see them threaded on the xcancel link:

https://xcancel.com/eastdakota/status/2062860530360959273

duskwuff• 2 months ago

The third is in a reply. Use the XCancel link to view it without logging in.

tty4562• 2 months ago

I hear story #1 periodically, but almost never see a quote. How is this stuff said specifically? It always seems like hearsay. I'm sure it's authentic, but I'd love to hear the details on how that stuff is actually said in conversation.

jphil529• 2 months ago

Really sad that people are still walking around with those beliefs.

flawn• 2 months ago

The fact that you hear this often (also not only from the victims of this) should signal that, even without quotes, there is likely some truth to it.

ohyoutravel• 2 months ago

This doesn’t follow logically.

malshe2• 2 months ago

Someone asked him this down the thread. He replied that it was said to him. So it’s a first party account.

tty4562• 2 months ago

It's interesting he provides quotes for the other stories, but not this one. And still doesn't in the thread. Again, i'm not debating the authenticity, but is it possible he's inferring that based on something not-so-explicit being said?

I'd love to see/hear the words that people actually say when I hear stories like "they said they wouldn't [invest/buy/etc] from me because i'm a woman".

chasebank• 2 months ago

I came across this thread on twitter this morning but isn't he the CEO / co-founder and he's clearly a man? I guess I don't get the reference. I know he has a co-founder who's a female, maybe she was lead at the time?

"1. A Sequoia partner passed on Cloudflare because he didn’t think a woman could lead a security infrastructure company. Seriously. "

emmelaich2• 2 months ago

He's referring to Michelle Zatlyn afaict.

"Young Global Leader '14. Co-founder, President + COO Cloudflare"

carefulfungi• 2 months ago

I doubt VCs have different distribution of personal character from other professional groups.

In my experience, a more interesting friction is that VCs are pursuing a diversification strategy while founders are pursing a singleton strategy.

mattas• 2 months ago

VCs are the shotgun cartridge and startups are the shot.

ajb• 2 months ago

It used to be that VCs wanted founders to pursue a singleton strategy, because they wanted the diversification to occur at the level of their portfolio - on the grounds that at the level of an individual startup, diversification would less likely to succeed. The catchphrase was that they wanted "pure play" investments. So it would be interesting to know why it's now a cause of friction. (The "pure play" thing was actually from before YC took off and gave founders a bit more agency; and before the "pivot" was popularised; I get the impression that VCs back then were not too happy for a founder to change direction and confuse their portfolio)

hn_throwaway_992• 2 months ago

After reading some of these stories, I don't see how you can't come away thinking that psychopathy is a trait that goes hand in hand with being a successful VC. The story about Vinod Khosla speaks for itself, but after reading #2 I clicked on Marc Andreesen's twitter profile, which currently says this:

You’re not talking to someone who woke up a loser. That loser attitude, that loser premise makes no sense to me.

These fuckers are grotesque caricatures in human skin.

teaearlgraycold• 2 months ago

If you're not aware that's actually a quote from Jensen Huang.

Our_Benefactors• 2 months ago

This quote is from a viral interview between Jensen Huang and Dwarkesh Patel, the latter made some points during the interview that were very condescending and betrayed a deep misunderstanding of technology.

hn_throwaway_992• 2 months ago

Thanks, I wasn't aware of the original source.

FWIW, while I think the comment makes much more sense in the context of that original video, I don't think Huang is making particularly good points in that interview. Like I thought the analogy with enriched uranium was a pretty good one, and at the very least Patel made exceedingly clear which points are analogous: namely, that it was powerful tech that had both civilian and military uses. That seems like a very fair discussion point when it comes to powerful chips. And Huang's response is just "Hey - that's a bad analogy", but I think his defense of it being a bad analogy is a poor one. Plus, I think it's false to say that Patel "betrayed a deep misunderstanding of technology" given that one quote he gave about why it would be a bad idea to sell advanced chips to China came from Dario Amodei of all people. I'm quite positive Amodei doesn't have "a deep misunderstanding of technology".

But back to the original topic, I still think it's beyond douchebaggery to make that quote your header in your Twitter bio, but it also fits with literally everything else I've heard from Andreessen to confirm to me he's far to the right on the psychopathy (i.e. "lacks empathy") spectrum. He's constantly dividing the world up into "winners" and "losers", and being a billionaire he's obviously a "winner", and if you propose any changes to society or regulations that would help lessen the naturally wealth-concentrating effects of technology then you're obviously a "loser".

ralph84• 2 months ago

On one hand, every VC who passed on Cloudflare missed out on what is now an $88 billion company. On the other, if they didn't invest because they didn't like the underlying economics, they were actually correct. 17 years after founding, Cloudflare still has never turned a profit.

navs• 2 months ago

As bad as these VCs seem to be it's something to see Prince socializing with other bad actors like Maguire while lamenting the bad actors in the space.

LordJim• 2 months ago

What's bad about Maguire?

nailer6• 2 months ago

HN policy is to link to the site. If someone wants to use an archive service they’ll use it, meanwhile most of us want to be able to reply, follow, read etc.

tamimio• 2 months ago

Link for non x users:

https://xcancel.com/eastdakota/status/2062860530360959273

NDlurker• 2 months ago

East Dakota is Western Minnesota. This is MAGA country

maest• 2 months ago

He's a very MAGA guy, though.

lrvick9• 2 months ago

I once had a VC ask to meet my founders and I for his morning breakfast at a run down diner in texas. So we fly out from Florida pitch deck in hand, and meet him at his booth.

We pull out the deck, he says "Do not need that. How many paying customers do you have?"

Given we were at MVP stage and were running a public sentiment analysis driven social media search engine using our published academic AI work (15 years ago) we said "None yet. The capital to build the paid portion of our product, which is popular, is why we are here."

As he eats his eggs he goes "Come back when you have a hundred or more paying customers" and sent us packing .

Not even a 5 minute interaction with people he asked to fly out to pitch him, and were not even allowed to pitch.

I expect rejection by default at an early stage, but that one was particularly mean.

It will forever remain my go to example of a meeting that could have been an email.

One excited investor we did find for another project ended up being the now famous con man "Michael Prozer" who got on who wants to marry a millionaire using forged bank records and proceeded to get actual capital based on this lie until he was arrested for fraud.

My opinion of VCs is still... recovering. The bar is in hell.

keiferski2• 2 months ago

At what point does this kind of groveling behavior actually become a negative signal, though?

If you’re willing to fly halfway across the country just to talk to a VC in a diner, it signals a lot of desperation IMO.

I haven’t had a ton of interactions with VCs; however, I have read innumerable books about the VC world, and a recurring theme is that VCs are competitive and don’t like being left out of a deal / losing a deal to another VC.

By willing to fly so far away for nothing, it signals that no other VC is interested.

iJohnDoe• 2 months ago

You're not really wrong. However, it was a power play by the VC and to make themselves feel important. Hopefully they grew up a bit since then.

No matter how you look at it, if the only question was, "Do you have 100 customers?" then they could have sent and read that e-mail over breakfast.

simmschi• 2 months ago

So, how long did it take you to go 100 customers after this pitch?

lrvick9• 2 months ago

In the end my co-founders and investors wanted to sell to a single specific political party exclusively. I chose not to participate as it did not align with my goals, and started a small IT company instead. The original project was dead within a couple months of me leaving given no one else had any idea what ssh was.

sharts2• 2 months ago

Why is that mean? It seems prudent for any investor to invest based on real metrics.

What’s probably dumb is that none of those questions/concerns were brought up ahead of time (by either side).

Marciplan• 2 months ago

well they could’ve pre-ement that

Frannky3• 2 months ago

I started a new company with my cofounder 6 months ago. We focused on what people wanted, built a manual solution then automated it. We have 60% margins and a system ready to scale. We are thinking of avoiding investments. I am not sure if we are in a new moment in time where investments are something people do because of what used to be the best to do. And I am not saying avoid blitzscaling but do it without external capital. The hypothesis is that a small team, Claude Code subscriptions, apis and automation/code are enough to make it work via profit reinvested from sales. And it will be actually a competitive advantage because of removed costs, mostly from coordinating a lot of humans and having outside forces pulling in different directions.

lrvick9• 2 months ago

Buy a few GPUs so you can skip the Claude subscription, and never have to worry about rate limits, privacy, or refusals. Will pay for itself with a small team in a few months.

I mostly work on custom from scratch Linux operating systems and packages across dozens of languages.

I do 100% of my AI work today using two AMD r9700 pro GPUs on a 10yo pc I pulled out of an old arcade machine.

AI subscriptions only make sense for people who cannot build a basic home computer.

momojo• 2 months ago

How long has this been your daily driver? How has this setup worked for you compared to enterprise models? Which models?

sharts2• 2 months ago

How do the self hosted models compare in terms of foundational ones? Say comparing to opus 4.8 1M, etc?

weitendorf2• 2 months ago

It’s not cheaper to run Claude in your own GPUs rather than the $200/mo for certain workloads. For a large portion of what I work on, the bottleneck is my time, not tokens. You certainly could throw more tokens at it but if you need it to work a certain way for certain reasons, and your plan/goals are beyond the scope of what the top-capability models can do, then throwing them at the problem just bogs you down in extra cruft or reviews/iteration that you could more effectively do being the primary driver of the work.

julianlam• 2 months ago

enough to make it work via profit reinvested from sales.

Yes, this is just called running a business.

weitendorf2• 2 months ago

This is what I’ve been doing. I’m not even against external funding, I just see it as instrumental to the ultimate goal of building a sustainable business. Venture capital is basically a super high interest loan so it’s only something you want to take when and where it can be effectively deployed.

Most other founders/business owners and investors I know don’t see that as a controversial statement (that it makes no sense to see access to capital through a scarcity mindset, when it is factually accessible) but because most customers or potential employers aren’t one of those, it’s been a problem because this isn’t what you’re “supposed to do” and so they read into it from a social/legitimacy angle.

Regardless, it’s quite rewarding IMO and I highly suggest it to people with the means to pursue that path. I don’t see why people get so worked up on the whole VC thing, at the end of the day it’s just lending. Having dabbled in angel investing on the end you get a lot of people lining up for what they clearly perceive as unsecured loans or a social signal and on the other so many people get caught up in the dynamic of dangling said unsecured loans (when I first started it felt like some of the investors reaching out to me were just doing it to boss me around or something, like sir you can clearly see I started this two months ago and you dm’d me on LinkedIn to chat, I don’t need your money).

IMO most good founders/investors are credibility-maxxing but because of the social dynamics and moral hazards inherent with spending OPM you get weird other behavior

Frannky3• 2 months ago

Thanks for sharing this. This is the same as what I am thinking. I still see the gravitational pull of doing what seems like the supposed thing to do, but it makes sense to do what the model in our mind suggests makes the most sense, especially when reality is rapidly evolving and historical information may be outdated.

dzonga• 2 months ago

maybe it's the peculiarity of the tech industry to make it seem they're doing something entirely new & different in the world.

how did unproven, fringe ideas get funded before the 1960s ?

you either took a loan, some rich patrons put some money or you were financed by vendor financing. most of these terms were not humiliation rituals. they were built on trust & knowing each other.

the bad & good were funded that way whether merchant expeditions, slavery, colonialism, steam engines.

you didn't have Venture capital. & soon enough venture capital will disappear altogether.

FerretFred• 2 months ago

Fascinating - thanks for sharing!

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