alt Hacker NewsI think “regular” VCs are one of the cohorts of people I feel worst for! I have a lot of friends who got into the business wanting to help entrepreneurs, and now they’re stuck on a cap table with folks who they’d never want to do business with. It’s not any different than the founders or employees who don’t want to be saddled with these guys, either.
The hard part is figuring out how to change these structures so that people can actually extract themselves and still build stuff that isn’t toxic and destructive.
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Great write up anil!
Agreed it’s so difficult. And every time I think we have things all figured out, someone flips the table!
I’ve seen some ruthless terms for angels too. My buddy took an uncapped SAFE to get in a deal while the deal runners gave themselves a cap.
I think the root problem is it takes a lot more money and resources to compete now than it did before. Before, due to broadband being new, everyone not already having high performance computing devices, and the quickly decreasing costs of hardware, it was possible to use a skeleton crew and barebones resources to do something impactful. Or you have to be a very, very exceptional performer.
bix6 alludes to it another comment:
I don't feel bad for VCs. Venture capital has turned the old style of startup entrepreneurship into a financial hustle of Startupism that is about trading equity value and not about venture creation. Maybe it always was about that, but at least in the 1960s-early 2010s it seemed at least somewhat more about business and value creation. Now it all just seems like a financial hustle. I hope we see VC become the minority way that businesses are built and financed as it used to be in the tech industry.