Comment by michaelochurch | Hacker News Reader

Comment by michaelochurch | Hacker News Reader

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I've never raised money-- I wasn't born into the connections, and that's what being "fundable" is actually about-- but I've worked in VC-funded companies and I hate what they have done to this industry.

The slow decision-making is about three things:

(1) It reaffirms the rank of the VCs. (Status waiting.)

(2) It's a test of the petitioner's social status. (If desperate or low-status, the petitioner will continually seek feedback.) The whole point of the time-wasting deliberation is to weed out the desperate, and more importantly to see if you come from the right social class (and can therefore summon enough resources to make their slow response tolerable) to be funded.

(3) It gives risk-averse VCs, who are driven more by their individual career goals (of being "in on" career-making deals that occur once every few years and require social access) than portfolio optimization, plenty of time to collude, trade favors, and peddle influence.

It will never change or go away. Nor do I think we will see an end to this insane bipolarism in which a company is either overfunded or forced to operate on a shoestring.

VC is just unhealthy for software; it works (because it's the only option) for biotechnology startups that require $50m+ just to get started, but for software it's just kingmaking (work with us, or we fund your competition) that doesn't really add anything.

I wasn't born into the connections, and that's what being "fundable" is actually about

Are you amenable to being convinced that this belief is false if I can point to people who had no connections at birth but are funded or clearly fundable?

I don't think anecdotes can support or contradict the type of assertion he's making. People frequently point to that rare individual who overcame adversity. It doesn't really prove anything. The system is big enough that there will be instances to support nearly any belief. I think the opposite of what he's saying might be something like: "It's not who you know, it's what you know." I can only speak for myself but that seems much less true.

Not really. Most of them teamed up with well-connected co-founders. The problem is that 95+% of those well-connected people take an insufferably superior stance toward anyone who's not in their set. If you can find one in that other <5% of that already small set, good for you, but it's not common.

If you're from a rich and well-connected background, VCs who turn you down mentor you until you're fundable, and set you up with EIR sinecures so money's not an issue. If not, you're trying to hit the head of a pin from a mile.

The game is clearly rigged, but very few people have the courage to talk about it.

I meet people every other week that were not born into connections, in fact they may not have any connections today. And yet, they're fundable: they have a product, they have some level of validation, they may not even be looking for money outright (the money finds them as often as not).

Some of these teams blow me away with their technical expertise, plenty of these guys & girls have had a life full of headwind and yet they push on. The one common factor: they don't complain about their misfortunes (perceived or real) they just keep pushing forward. I'm seriously impressed with that, being born into anything has nothing to do with it whatsoever.

Finally, yes, being born into connections can help. But I've seen lots of people that were born into connections/wealth end up losing it all in a very short time.

VCs for software make good sense in many situations, companies that are still on the losing side of the equation that want to sew up the market before a competitor comes along (not all software is throwaway apps), international expansion, horizontal expansion across several niches. All of these cost money, and sometimes bootstrapping just isn't enough (especially with older founders).

Not only is this overly-pessimistic, but your assertions are largely unfounded.

VCs are not out to "stick-it" to anyone. They want to be a part of a great deal just as much as the next person.

Key bottleneck is that the process is too slow. Not designed for today's 15-minute world.

What part of the industry were you in before the VCs did the things you say they did to the industry?

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