Del Johnson

"The Most contrarian thinker in VC" & Father of Modern Venture Capital. VC, Angel, LP. prev: @Google @Oracle @ucberkeley @Columbialaw

[Del Johnson @DelJohnsonVC]

@mhlakhani @ZaidJilani @VCBrags U.S. Venture capital hasn't been able to outperform European VC for the past 20 years. The Thiel Andreessen generation of VC took one of the greatest engines of economic growth and American ingenuity, and turned it into an old world rent extraction scheme.
https://t.co/quGiFwkrhR

[Jon Chu @jonchu]

Was just told by an emerging manager:

LPs care more that I am in a hot thing a tier 1 marked up than if I have a 7x fund.

I think that explains a lot about the current ecosystem and why things are so concensus.

[Del Johnson @DelJohnsonVC]

@credistick https://t.co/PcHlccpL3w

[Del Johnson @DelJohnsonVC]

@credistick That's right. The only way forward for innovation is to take new VC selection out of the hands of megafund managers. As long as a few big VC managers and funds control both VC and startup selection, society will be left with a limited range of ideas being funded.

[Dan Gray @credistick]

Modern venture is basically a financial lifestyle product for ambitious young people who are too smart for MLM or dropshipping, but not smart enough to build a cash flow-positive enterprise.

[Del Johnson @DelJohnsonVC]

@credistick ✅

[Del Johnson @DelJohnsonVC]

@howisthewater When people weren't going to do anything about VCs, I noted that extensively and got (wrongly) criticized for being "negative" so I am not a cope monger. I am saying that the on the ground situation has changed enough to produce the opportunity for change now.

[Del Johnson @DelJohnsonVC]

Being right years ahead of others is extremely satisfying. And people apologize to me and tell me I was right and they were wrong all the time, actually.

[SerenityJones @Serenit35382959]

Being right years ahead of others isn’t nearly as satisfying as people think. Nobody apologizes for treating you like a crazy. They just come back years later, repeating what you told them as if it’s some groundbreaking revelation because they finally heard it from someone else.

[Del Johnson @DelJohnsonVC]

@howisthewater I think the new legislators are incentivized to regulate these people specifically due to the bets these people made against the new legislators recently.

[Del Johnson @DelJohnsonVC]

@howisthewater We shouldn't expect scammers to change the nature of their scam. This is a matter of external regulation not internal behavioral change. This isn't being thought about the right way.

[David Z. Morris @davidzmorris]

What
The
Fuck

[Del Johnson @DelJohnsonVC]

@davidzmorris You didn't know?

[Del Johnson @DelJohnsonVC]

@valhalla_dev And you should vigorously pursue attribution in these specific cases, but not because you care about notoriety, but out of respect for the established conventions and norms you followed when writing your own pieces.

[Del Johnson @DelJohnsonVC]

@valhalla_dev I agree with this mostly! You generally should want most of your ideas to propagate freely. Some ideas though, like ones that were made in a published piece, or true core original contribution from you should be attributed by convention.

[Dan Gray @credistick]

The @a16z article quoted below uses the findings of this paper to support the idea that VC firms show persistence of performance.

(e.g. A top-quartile fund is likely to be followed by another top quartile fund from the same firm.)

Indeed, this paper is often shared by @a16z partners because it also makes the argument that increases in fund size do not change GP performance.

It’s worth knowing that the study looked at funds from 1984 to 2015; 17 vintage years prior to dotcom, 15 afterwards.

When it talks about fund scaling, it is talking about managers that ~double their fund size, not those who go from $300M to a $15B multi-fund strategy.

In fact, it specifically uses the challenge of scaling VC, and the implicit constraint on fund size, as a reason that VC persistence appeared stronger than PE in their findings.

“We note, however, that performance persistence is stronger in VC than buyout, perhaps reflecting the more difficult challenges of scaling VC investing and thus competing away GP advantages.”

Finally, the study does not find persistence in VC firms generally, but in specific fund strategies which would be separated by factors like specialisation, stage or individual partners.

TL;DR — This is a paper about persistence in traditional VC strategies, which is why it has very little relation to a16z, despite how often they may misuse its arguments.

https://t.co/ARQv9XncQD

[Del Johnson @DelJohnsonVC]

@addyosmani I can't help but think that by doing this you're making it really hard in the future to fight the idea that anything your tool builds is defacto your fault. In addition to some of the other arguments people are proffering, it seems really strategically short-sighted as well.

[Yvonne Bajela @YvonneBajela]

After more than a decade backing founders, I decided to make a bet of my own.

Today, Evertrue Capital is officially out of stealth with an oversubscribed $17M debut fund.

Backing founders before consensus forms.

More in @TechCrunch: https://t.co/9A5Grapp1z

[Del Johnson @DelJohnsonVC]

@credistick Really one of the pioneers of managerial venture capital. Ironic.

[Dan Gray @credistick]

Analysis from @deedydas below, looking at which founders are most likely to get a funded by a “tier 1” VC.

The most predictive feature is having previously worked at a “tier 1” firm.

Research looking at 85,099 unique startups, of which 1,759 were established by entrepreneurs with prior VC experience, illustrates why this is flawed:

VC experience helps a founder raise more capital — but there’s no benefit to outcomes when compared to other founders that raised a similar amount.

i.e. The fundraising advantage is driven by connections and insider status, not meritocratic selection.

https://t.co/KgqqIDRVZU