
Secret's collapse shows the traditional VC funding model is broken - lladnar
http://venturebeat.com/2015/05/23/4-lessons-from-secrets-collapse-the-traditional-vc-funding-model-is-broken/
======
paulhauggis
"We need to question why most VC firms intervene in company decision-making in
the first place, when their original decision to fund these startups was
presumably based on how effectively the founders had been handling decision-
making up to that point."

I don't think they were basing it on how effective the founders were. Many VCs
don't trust their money with inexperienced business owners. I sure wouldn't.
They see an idea that could possibly make money combined with desperate
founders. After making a deal for majority control, they move their own
experienced people in to run the company.

Many founders like to play the buyout game where they don't really care about
making money from a product. They try to get as much investments as possible,
get paid in the process, and hope for a buyout from a larger company that can
take the assets and users and eventually monetize them.

"Secret has proved this to be a bad strategy, clearly demonstrating that if
the founders’ buttons are pushed hard enough, they may decide to simply walk,
allowing the house of cards to come tumbling down. As we know, when this
happens, everyone loses."

What was the original 'vision of the company'? A business is there to make
money and an ROI for the investors. This is the #1 goal as soon as you take
any investments.

