An Engineer's View of Venture Capitalists

"his recommendations at the end seem in tune with some of the ideas behind YC"

My thoughts exactly. Sure hope the YC guys become rich enough to fund people beyond a couple of months. Right now their main value seems to be in the connections they create for you.

What's your start-up and how much are you looking for?

Yeh, that's the tricky part. Mention huge flaws in the system and everyone folds their arms and nods their heads knowingly, going "Mmm-hmm, mmm-hmm."

BUT ask for follow through with different behavior, ie, "action", and all of a sudden it's the rolling of the eyes, and "yeh, well, you know, the thing is .." and lots of cricket-chirp cricket-chirp cricket-chirp

Plenty of nerds are angel investors. Generally VC's are big funds of other peoples money and their job, or the firms, is in large part selling their fund to investors - I think geeks generally want make to their own companies if they don't have money or invest in other companies if they do.

Surely they'd eventually get bored at making up for lost time not having intercourse with hot babes; and how many fancy sports cars can you possibly buy before you realize there's more to life than driving fast.

Seriously, after you've bought the houses, the cars, the trophy wives, what else is there other than to get involved in the process?

Isn't that everybody's dream, the old, "Boy if I ever made it, I would do things SOOOOO differently!"

Otherwise, what's the point?

If I ever made it, the FIRST thing I would do (besides paying down my credit cards and finding a slightly larger apartment) is to try my hand at "doing things the way I wish they were done" ...

I think it would be a heck of a lot more fun putting yuppie ivy-league mbas out of business than spending money on fancy food and cars and designer suits ...

But then again I don't have a lot of money so what do I know? Maybe once you have the money and can actually afford those things you develop an inevitable, "the hell with everyone else" attitude ...

I can't begin to express how true this article is. I was once a naive, yet optimistic 24 year old who spilled his guts to a reasonably prominent EIR at what was then a top-flight VC firm in the area. I started suspecting something was wrong when I would get invited to their super-fancy digs (receptionist had 3 20-inch IBM flatscreen back when a 20-inch flatscreen actually almost cost $20k, the board room had 30 Aeron chairs, etc.), yet curiously enough never while anybody else was there, and would always be grilled for my 2 years of research findings, but after they "sucked out all my ideas" I couldn't seem to get any call-backs.

Tried another startup a year later and got sued by the EIR who claimed at first that our ideas were very similar ... then so similar that in fact he thought I "stole" what he saw as "his" idea.

I couldn't believe the nerve, and yet there they were, grown men twice my age who made million screwing me over without a second thought about all the crap they pay lip service to on their websites (ie, "Our reputations mean everything to us" and "Our honesty is the basis of our credibility") and all sorts of other mumbo jumo.

IN CONCLUSION: By all means keep at it, but be very, very careful - if they screw up they're still VC partners or EIRs, but you're done for at least that idea.

Don't fall for this trick! Just because you have no idea how to do those things, don't fall into the trap of assuming that a V.C. does know how to do them / is willing to roll up his sleeves and do the hard work. Most VCs, despite constant blogging of how many hours they work, are actually quite lazy and allergic to work.

Actually, though they'll never tell you, and often say the opposite on their websites, VCs view big time involvement in your day to day business as a sign of trouble - ideally they want to sit on their rear ends, visit you once a month and tell you to "optimize the radical paradigm shift" then go home and write a blog about their value added and entrepreneurs should be grateful they have VCs telling them how to do such things.

When they actually do have to get involved, they'll do so as the article suggests and "punish you" by shoving "their team" in your startup with a "see what you made me do? See what happens when you make me break a sweat?" attitude.

IN CONCLUSION: Just because you don't know it, doesn't mean you should assume that some smug, confident-looking guy sitting across the table from you (the VC) DOES know how to do it. For all you know he might be as clueless as you.

There was an awesome article on this subject from about 10 years ago called something like, "The pussification of silicon valley"

Actually most VCs are nowhere near what you would think of as "rich" ... they just have use of fancy offices paid for by the fund, lease a fancy car paid for by their 2-300k saleries, etc. - it's designed to give anybody talking to them the impression that "they don't need you" and you're lucky to be breathing the same air they are.

On the other hand I've formed some friendships with a few high placed people in a large company here and there, and they assure me that pretensions aside, VCs usually spend most of their time calling contacts in the corporate world begging for deal flow.

Most VC is just bluff.