

Fuck the VCs (or not fuck the VCs) - dennykmiu
http://furrier.org/2008/08/28/venture-capital-and-the-modern-startup-building-a-company-is-a-team-sport/

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ryanwaggoner
I disagree with the premise that anger towards VCs isn't warranted. The author
paints a picture of the VC as an innocent victim of changing times:

"VC doesn’t have a greater share of bad actors than the ecommerce or gaming
sectors. Large-scale, software VC is simply a formerly great business in
decline, and there are a lot of good, smart people who haven’t made in VC yet
who are worried about their (and their families’) economic futures. It’s not
evil — it’s their job and they may not feel they can switch."

Those poor VCs who have no other career options available to them, and must
therefore resort to squeezing every last drop of blood from entrepreneurs who
don't know any better.

I absolutely believe that there are some fantastic VCs out there, but anger
against the industry is only natural when you've been screwed over like some
of these companies have.

~~~
dennykmiu
Being angry with VC's is like being angry with mother-in-law. They will always
be a pain if you insist on sleeping with their daughters. So make your choice,
stop taking their money and they will cease to be your problem. Be angry ...
but move on.

~~~
tonystubblebine
I love this analogy.

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shimon
There are some good things in this post, but did anyone else get the
impression that the author ran parts of it through a Markov Chain text
generator to bulk it up?

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dhouston
<http://www.joelonsoftware.com/articles/fog0000000056.html>

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dennykmiu
This is the best article ever for explaining the two possible startup models,
bootstrapping and venture-funding. I have done both, one that was funded by
VC's and failed and one that was bootstrapped and succeeded. I would be the
first one to admit that I have limited data points. Thanks for sharing.

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Hexstream
I've always wondered, do you _really_ have as much decision power with 51% of
the company as 100%?

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gaius
Nope: <http://waxy.org/random/arsdigita/>

Having said that, it's not at all clear what Greenspun really wanted VC money
for in his cash-generative services company. Perhaps he shouldn't have bitten
off more than he could swallow.

~~~
mechanical_fish
_it's not at all clear what Greenspun really wanted VC money for in his cash-
generative services company_

Read his new, improved, more nuanced explanation in _Founders at Work_.

If I were to summarize his answer: It requires intestinal fortitude to embrace
slow, organic growth at the cost of _turning down_ lots and lots of business
from a market that is _begging_ for your services. But it is also hard to
recruit people to grow your company -- especially businesspeople -- in a
bubble economy where every company with a domain name is going public with
billion-dollar valuations. So ArsDigita tried to come up with a plan to go
public, and that inevitably involved VCs, because back then investment banks
didn't bother talking to privately funded companies, because the fix was in:
Why bother working with actual, profitable companies when you can make more
money by scratching a VC's back? It's not like the market was paying attention
to fundamentals at the time.

The moral of this story is that bubbles suck. They're completely disorienting:
The market value of everything is screwed up, and you're surrounded by
irrational people. I do not miss those days at all.

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peanutcruncher
The first thing anyone looking for venture capital needs to understand is that
the primary objective of a VC company is to turn every dollar they invest into
your idea into $10 over a 2 to 5 year time frame.

Once this fact is understood and understood well, then many of the emotional
issues just sort of go away.

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ahold
fuck'em

