Comment by staunch | Hacker News Reader

Comment by staunch | Hacker News Reader

It's shocking how class-based Silicon Valley is. You would assume investors look for innovative ideas and capable people to execute on them, but nope. Ideas don't matter and it turns out when investors say "team" they mean "what club memberships does your team have?"

Silicon Valley investors basically just invest randomly in people based on their membership in a club. It's only because a small percentage of them turn out not to be complete idiots that it works at all. The smartest of the 99% receive no funding, while the entirety of the 1% wealthiest do.

It's an insider's club built around the "top schools" (as they call themselves). You're either in the club or you're an outsider, and only a handful of token outsiders are needed for display purposes.

If you want help in Silicon Valley, you must have either: 1) a rapidly growing business (traction) 2) been accepted into a "top school" (pedigree)

It's not a conspiracy per se, it's just a result of rampant cronyism and nepotism. How do you think investors get their jobs after all...

Some notable examples of non-rich founders, that the rest of us can hope to emulate: Steve Jobs, John Carmack, Palmer Luckey, Linus Torvalds, Larry Ellison.

OK so your post boils down to "VCs want to see growth or prestige". It's actually that they want to see customers and revenue, not necessarily growth. And so the sentence "VCs want to see revenue and customers or prestige" is completely reasonable.

Look, if you're a VC who goes to those "clubs", and you trust the people there and are comfortable giving them your money, _great_. Why should they be handing it out to you, with your no-revenue company and no prior associations?

Why not base it on the actual product and skills/experience of the founders, like they claim they do?

Palmer Luckey would have trouble getting funded with his VR headset in his hands, based on his background. VCs would sooner fund anyone that went to the same school they did.

The thing is that you can sell a good product without VC money, even it's a high-capital product.

> [...] the sentence "VCs want to see revenue and customers or prestige" is completely reasonable.

It's reasonable when prestige is earned through individual achievements. But most of the time it's earned through affiliation. Complete outsiders can succeed, certainly - but the bar is much higher for them.

What's your point? Others can raise money more easily than you can, due to some ambiguous idea that investors prefer these other people from Stanford? No one that is going to build a successful company should care about that. Because you're 10x better than the competition. The lack of an inherited advantage isn't going to make the difference between success and failure for you.

> What's your point?

In Silicon Valley, affiliation to established institutions - schools, conglomerates, social circles - correlates with access to early-stage capital much more strongly than it correlates with actual performance as an entrepreneur.

This is bad for two reasons:

1) Silicon Valley investors, as a group, are wasting capital by investing too much in low-performing insiders, and not enough in high-performing outsiders.

2) Silicon Valley entrepreneurship amplifies social inequalities instead of reducing them, because a disproportionate share of entrepreneurial opportunities are reserved for insiders.

Solomon Hykes. Another inspiring example of an "outsider" succeeding in Silicon Valley.

I don't know about successful - Docker still has to prove that it can build a large sustainable business. Obviously I am bullish on the opportunity :)

I definitely was a complete outsider when I moved to Silicon Valley: first generation immigrant, with no affiliations or credentials whatsoever, no traction, and a lot of personal debt. If YC hadn't taken a chance on us and written that $17,000 check, we probably would have never made it this far. And I had it easy compared to other outsiders: I had US citizenship, my english doesn't betray I'm a foreigner, and of course I'm a white male.

As someone who went to top school/s but didn't major in CS (or business) and has trouble making friends, I certainly wish that credential was all it took. Then the playing field would almost be more accessible and meritocratic than it actually is. But presumably there's further layers of segregation and inaccessibility within those institutions.

Eh Linus Torvalds father Nils is a politician and member of the European Parliament, not exactly a coal miner all though Nils might've had maoist sympathies as a kid.

Not sure is Larry Ellison is a role model for any human. For deities, maybe.

For those not in on the joke, there's a biography titled "The Difference Between God and Larry Ellison: God Doesn't Think He's Larry Ellison".

https://www.amazon.com/Difference-Between-God-Larry-Ellison/...

Sure he is. He just has flaws like anyone. Einstein treated women badly.

It's really weird reading this when the first people I can think of that got funding didn't go to a top school, didn't have traction.

Naturally you can expect more top school people to do well because they're smart overachievers.

Is there data you have on this? How big is the difference in funding uptake for students from Harvard versus students from low-class schools like Caltech?

Reply on news.ycombinator.com