

The separation of advice and money - sinak
http://blog.samaltman.com/the-separation-of-advice-and-money

======
brandonb
The other implication is that control will become unbundled from money and
advice. An investor who offered money without requiring founders to give up
control--board seats, rights to block acquisitions, etc.--would gain a
competitive advantage when trying to get into the best startups.

Angel investors are already doing this at the seed stage. Crowdfunding will
push it up to series A.

------
aashaykumar92
The negatives posed in this post are hardly negatives. Companies will be able
to raise the money they actually need and not have to deal with shitty
advisors or gain great advisors and dilute a little more. To an extent, this
separation will weed out the shitty VCs, which is an ultimate win for the
industry. Is my logic correct?

------
acgourley
It's clear that well tuned campaigns with 10-100k seed capital can raise $1M+
for (partially) physical products.

One big question is how that will translate to software businesses. Successful
non-game software projects are few and far between. And they raise a lot less
[1]. Will JOBS act equity investing change this? I think it will take 4-6
years for a few people to win big with it before there is a bubble-level rush
of speculators.

[1] Annecdotal plug: we just had a subscription fitness app crowd funded, but
it took a lot of work and the median pledge level is way lower than in most
hardware projects:
[http://www.kickstarter.com/projects/acgourley/bitgym](http://www.kickstarter.com/projects/acgourley/bitgym)

~~~
badclient
Do we know campaigns that invested 10-100K seed capital and failed?

~~~
acgourley
Other than the ubuntu phone - I don't. It's hard to find good data as the
amount invested to date is not shared.

------
sinak
Is there room for an advisory-only VC that's not beholden to LPs? And if so,
what would that look like?

~~~
j_baker
Erm... Correct me if I'm wrong, but isn't "advisory-only VC" an oxymoron? If
you're not investing capital, you're not a Venture Capital firm.

~~~
sinak
Yeah, I should have been a bit clearer on what I mean: VCs typically offer a
lot more than just money. Things like their networks, advice, and positions on
company boards for example. There could be quite a bit of value to companies
that simply fill those roles, as an organization, similar to what individuals
to as advisors.

I think that in many cases that might look quite similar to existing
accelerators, except that accelerators generally target very early stage
companies.

Sam discusses drops in the idea at the bottom of his post:

    
    
      The best VCs are great, and they will probably continue to 
      do well.  In fact, they’re so good that they could probably 
      get away with only selling advice—they understand how to 
      build big companies in a way that few other people in the 
      world do.

------
adammichaelc
Curious where the evidence is that advice and money are becoming separate. The
boards I've seen are very full of VC's, who have both invested and give plenty
of advice.

Sam, if you're reading would love to hear your thoughts.

------
kumarski
Sam,

Well written article.

Just one small typo.

"Quick and painless fundraising, without advice necessarily being part of the
package, is what many founders what."

want _

