

Shoehorning startups into the VC model - darrelsumi
http://cdixon.org/2012/07/19/shoehorning-startups-into-the-vc-model/

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mvzink
If there is one thing I wish I saw more of on HN, it's posts about funding and
business outside of the VC model. I feel the thoughts expressed in this post
are on the rise.

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acgourley
I'd like to see analysis that suggested if traditional VCs have it right or
not. Yes, yes, startup returns follow a power law distribution, I agree. That
doesn't _necessarily_ mean that it's optimal to chase the potential top
companies!

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aaronblohowiak
"Shotgun" angels take a different strategy..

Edit: also, if you think about the YC acceptance rate vs the VC acceptance
rate in terms of attempts to money, then it is interesting that VCs consider
YC a filter. IIRC, YC has a higher acceptance rate than most top-tier VCs.
Note that i probably don't remember correctly ;)

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brudgers
_"There are lots of tech companies that are very successful but don’t fit the
VC model. If they don’t raise VC, the founders can make money, create jobs,
and work on something they love."_

e.g. Microsoft

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adventureful
His billion dollar marker is drastically high. He has been living in dotcom
fantasy land for far too long.

There's no reason you can't raise $250k for 25% from an angel investor, to
build a $10 or $20 million business. That's a helluva result to put it mildly.
You know, building an actual business that produces actual profits, not
vaporware built-to-flip companies that produce nothing and only exist in a
tiny corner of the economy.

The stock market hasn't moved in real terms in 13 years or so. Interest rates
are on the floor. Any investor outside the big VC game would kill for a 10 or
20 fold return over 10 or 20 years. There's a beautiful thing called
dividends, which a successful business can pay to its owners. Dixon doesn't
seem to know anything about that however, as his assumed scenarios require the
big exit and ignore any other possibilities.

If you take $250k, and you build a $10 or $20 million valuation business, it's
not difficult to kick off a very nice dividend to the investor that provides a
stellar return on their capital. AND if you ever choose to sell, said investor
also gets their big exit as well. You can also buy their stock back at the
higher valuation and they get their exit that way. These types of results are
common in the real economy, but not so common in the fantasy dotcom economy.

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gruseom
This comment is an exemplar of how not to behave on HN.

It is as insulting ("dotcom fantasy land"? "Dixon doesn't seem to know
anything"?) as it is wrong: Chris's post is explicitly about "the VC model" as
opposed to "investors who are less aggressive about returns". Since he's
recommending that _fewer_ startups pursue that model, you could hardly have
missed his point more completely.

But it's the tone that is inappropriate, that sharp-elbowed nastiness that
strives to pack something mean in every phrase. I know it feels good to write
this way; I've done my share. But it really is like peeing in the swimming
pool, and not underwater either.

