Hacker News Reader

This quote from the article stands out to me:

"A Pro invests as much money, as many times, for as long as required for the situation to attain Clarity. This Clarity allows only two outcomes, Dead or Liquid. When a Pro declines the invitation to invest in a follow-on round, it means they’ve reached Clarity: In the eyes of the Pro who declines to invest, the company is Dead, their initial stake is worthless. Write it off and move on, no tears, no recriminations."

View on HN

I don't know much about VC, but it seems like this can't possibly be true. Aren't there times when a VC invests, and then declines a followup round because they still like the company but don't want any more exposure to their industry or country? And if a company is doing a follow up round valued at $X, any estimated valuation between $0 and $X-1 should be low enough that the VC doesn't invest in that round. There's no reason to assume it's always $0.

I feel like the situation JLG is talking about is specifically a down-round

Gassée is shorthanding a bit. VC is more specialized now than it was in 1990 when Be was getting funded. So now, there may be structural reasons. A seed fund isn't going to carry you through A, B, .... Still, his central point about clarity remains. But clarity will be different for different VCs with different investment hypotheses.

Reply on news.ycombinator.com