

Party (round) all the time? - akharris
http://www.aaronkharris.com/party-all-the-time

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ryan90
I'd love to hear more discussion on the statement "My thought is that party
rounds tend to leave companies without an investor who cares enough or has
pockets deep enough to bridge the company when necessary."

I did a party round, mainly because we could do it in a fraction of the time
it would take to get a lead. And we did have a couple deep pockets come in. It
worked out for us, but I could see it going the other way. Would love to dig
in more.

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birken
Seems like data accuracy is a big problem. Of all the data Crunchbase
collects, the individual smaller investors on seed/angel rounds seems wildly
inaccurate. I've just spot checked a few people who I know have made lots of
angel investments and Crunchbase accounts for maybe 10% of them.

My guess is that sometimes Techcrunch lists more than 10 "notable" investors
in the announcement and somebody puts that into Crunchbase, but other times
Techcrunch lists a smaller number. Either way, whatever Techcrunch reports is
probably unrelated to how many different investors there were.

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akharris
I agree that it's a potentially large problem, though I'd bet it's a
systematic under-representation which would draw roughly the same conclusion,
albeit at a higher overall rate.

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birken
It is certainly possible, but you really don't know. Especially given that the
numbers are so small, any false negatives would affect the data quite a bit.
And you are making very strong claims with very precise measurements that are
drawn from a very error-filled data source.

A better source would be a survey sent to YC companies, or perhaps data from
some internal YC database. That will have its own sampling issues, but the
accuracy will be leaps and bounds above Crunchbase.

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thestranger
I'm confused as to what is being shown in the first graph. How can the number
of party rounds be greater than the total number of rounds in some places? Why
does the y-axis have different numbers on the left and right sides?

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twic
The axis on the left is for the blue party rounds line, and the axis on the
right is for the red total rounds line.

I assume this is because party rounds have never been more than 3.7% of total
rounds, so showing them on the same scale would have left the party rounds
line rather hard to glean anything from.

A better approach would probably have been to express the counts as ratios to
their 2005 values; they could then have been presented on the same scale.

