Hacker News Reader

Comment by RockIslandLine | Hacker News Reader

The question is why won't they touch it. Unrealistic expectations of high returns kill deals too.

I'd be more than happy to start funding deals with high probabilities of low-to-medium returns. And I know for a fact that those deals exist at the small scale.

View on HN

People say this a lot but it's worth questioning, because the "unrealistic expectations" also make the portfolio math work, and if the math doesn't work, not liking the expectations doesn't turn a broken investment into a viable one. You can do a really superficial analysis in 5 minutes of Google Sheets to work this out for yourself, and at least crystallize your implicit expectations about the number of companies in your portfolio you expect to be profitable in N years as opposed to dead and gone.

I vaguely remember in the Startup podcast that Gimlet Media went to non-VCs before VCs would get in on their thing. And they did eventually do a $200k crowdfunding campaign. So clearly the argument "No VC = Scam" doesn't work. I do buy that the scam rate may be higher. But I think allowing yourself to be scammed some amount is probably okay.

Didn't they have a poor outcome? I feel like the only reason VCs got involved eventually was FOMO, not a solid thesis.

SPOILERS! Just kidding, I haven't reached the end (stopped when they started doing other startups) so I don't know how they ended up. Looking it up, looks like they sold to Spotify. I wonder if the deal was good.

Gimlet was not a good outcome. They sold because they had to - they had nowhere else to go.

It does not appear to have been a bad outcome for the crowdfunding investors.

Reply on news.ycombinator.com