
Bad Advice - diego
http://blog.eladgil.com/2013/11/bad-advice.html
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7Figures2Commas
> Ultimately you asked these people to invest because you thought they could
> help you.

I know this is accepted as Silicon Valley gospel, but it's worth rethinking
the notion of investor-as-advisor.

I won't say that investors are incapable of providing worthwhile advice, but
money is money and when raising it, you should be asking "Who is going to give
me the most money on the best terms?" not "Who can give me advice?" Most of
the time, the best advice will come from your customers, professional
colleagues/peers and employees. Much of the time, that advice will be provided
free of conflict at no cost.

~~~
pbreit
Seems like bad advice considering how freely the money is flowing right now
and how valuable a good investor could be.

~~~
7Figures2Commas
Your logic is flawed.

If money is cheap and freely flowing, which it is, why would an entrepreneur
pay a premium to an investor in the form of more equity for less cash, board
seats, more restrictive founder vesting and/or significant liquidation
preferences in exchange for supposed "value adds" like advice?

Entrepreneurs raising capital should take advantage of the extraordinary
environment we are in to raise as much money as is practical on the most
favorable terms possible. Period.

~~~
gojomo
...and then earn/buy the advice elsewhere. See also Naval Ravikant's view of
the once-upon-a-time VC-package of "advice, control, and money" becoming
progressively unbundled...

[http://startupboy.com/2010/12/01/the-unbundling-of-the-
ventu...](http://startupboy.com/2010/12/01/the-unbundling-of-the-venture-
capital-industry/)

...which has only accelerated (including by Naval's own initiatives) in the 3
years since that post.

------
pmikesell
"1\. Offers to make partnership introductions that are a waste of time."

This happens over and over and over again. It's compounded by the fact that
both of the introduced parties feel some amount of obligation to report the
introduction as "super helpful" \- and so this perpetuates. Some VCs are much
better about receiving honest feedback about the usefulness of these intros
(they are, after all people). It's best to set the tone up front a quickly. If
the intro wasn't helpful, say so and don't let them waste more of your time.

It seems to work well if you come to an agreement ahead of time that you would
like to pre-evaluate any intros before they happen. And don't let them start
suggesting a bunch of intros at the end of a board meeting - you've probably
got a million other things going on in your head at that time.

