VCs are like Chads on dating apps.
Founders are the Hot Girls.
Warm intro is swiping.
Mutual goal is to spin plates until highest value roster assembled- promiscuous capital formation carousel.
After commitment- soft harem of subsequent rounds.
M&A/IPO exit: transcendence.
VCs are hunters.
They find most deals outside the nest and love the chase.
If you cold email/DM, they’ll think something’s wrong, why would prey offer itself up?
Want funding fast? Be hunted.
Bonus: if more than one hunts you, they get even more excited.
1. Can be addressed by tax policy and better info to LP funders:
Public Pensions: 30-35% of VC -- this money should be freed up for folks to invest directly in startups with favorable tax treatment, i.e. no tax on first $X in gains.
Endowments/Foundations: 20-25% of VC-- donors should know that their donations are going into sucky VC bets.
Maybe the rest of the LPs will follow any correction from the above and stop funding failure mode jabronis out of herd mentality:
Insurance Companies: 5-10%
Sovereign Wealth Funds: 5-8%
Corporate Pensions: 3-5%
Fund of Funds: 3-5%
Others: 5-10%
Except for this source of GP fees:
Family Offices: 15-20%-- lots of VC folks are married into these and that's why they are VCs. Would be fun/revelatory to connect those dots.
2. YC points the way-- an open, non warm intro filtering, preferably data driven, alpha creating process, but one that scales like TikTok-- this is what I'm building with Slyk.
3. You can't educate people who don't suffer the consequences of their bad bets. From what I can tell, GPs and LPs seldom get punished for backing the wrong founders/startups. They can hand wave at power laws, and continue to spray and pray, deuce and juice.
This all has to change because 90% failure rate of founders/startups/vcs discourage potential founders from risk-taking at a time when we need 1000x more startups and entrepreneurship in general.
We are ripe for a new stage of VC. Image from @Prof_Slyk and his Venture Coffee series. Give him a follow if you like this sort of stuff.
Just one more reason why he's "The Most Startup Guy in the World™. "
His favorite food is dogfood.
His diet is 100% local organic dogfoodtarian.
He orders dogfood family style for everyone all the time.
Why are the models and actors all zaftig now?
Because the people are too.
What's the solution from the promoters of zaftig health?
A pill.
They get to have their big ag profits and their big Pharma profits too.
Next up: bug sludge for healthy protein, pod for healthy living.
Founders: Don't waste time thinking about VC "dry powder."
Even if they dump some into their flintlock rifle and take aim at the heat signature of a warm intro to an in-group team that "checks all the boxes," they almost never hit the mark.
#VCbaristas
“Why Bill Gurley & Josh Wolfe Think VCs Won’t Deploy All Their Dry Powder Anytime Soon”
@EricNewcomer on @bgurley + Lux take
https://t.co/I3MXdAdo0g
@paulg Do outcome distributions skew more toward failure for IYM-funded startups?
Implication is they would fail at higher rates, since shitheel investors add risk of friction, which is loss, and bring fewer benefits.
But early-stage is black box and success can make up for friction.
Giving bad advice to founders with warm intro caveats and syrupy sorries is the a-z of the busted founder/startup/vc paradigm.
They guy worked at YC for a year but doesn't understand that YC success comes from bundling product, capital, and community?
Haha.
Immad is a good guy.
Mercury is a good project.
Most VCs are just not very good at making bets on startups.
And that's a big problem when so much Founder Energy is wasted chasing VCs.
@paulg Avoid the baristas of Venture Capital.
Brew your own at home, then invite collaborators to join your klatch.
Then build, grow, share upside.
Then raise from your community.
Then apply to YC or Founders U to take it to the next level.
Don't squander your precious Founder Energy.