Party (round) all the time? | Hacker News Reader

Party (round) all the time?

aaronkharris.com

20 pointsakharris6 comments

I'd love to hear more discussion on the statement "My thought is that party rounds tend to leave companies without an investor who cares enough or has pockets deep enough to bridge the company when necessary."

I did a party round, mainly because we could do it in a fraction of the time it would take to get a lead. And we did have a couple deep pockets come in. It worked out for us, but I could see it going the other way. Would love to dig in more.

Seems like data accuracy is a big problem. Of all the data Crunchbase collects, the individual smaller investors on seed/angel rounds seems wildly inaccurate. I've just spot checked a few people who I know have made lots of angel investments and Crunchbase accounts for maybe 10% of them.

My guess is that sometimes Techcrunch lists more than 10 "notable" investors in the announcement and somebody puts that into Crunchbase, but other times Techcrunch lists a smaller number. Either way, whatever Techcrunch reports is probably unrelated to how many different investors there were.

I agree that it's a potentially large problem, though I'd bet it's a systematic under-representation which would draw roughly the same conclusion, albeit at a higher overall rate.

It is certainly possible, but you really don't know. Especially given that the numbers are so small, any false negatives would affect the data quite a bit. And you are making very strong claims with very precise measurements that are drawn from a very error-filled data source.

A better source would be a survey sent to YC companies, or perhaps data from some internal YC database. That will have its own sampling issues, but the accuracy will be leaps and bounds above Crunchbase.

I'm confused as to what is being shown in the first graph. How can the number of party rounds be greater than the total number of rounds in some places? Why does the y-axis have different numbers on the left and right sides?

The axis on the left is for the blue party rounds line, and the axis on the right is for the red total rounds line.

I assume this is because party rounds have never been more than 3.7% of total rounds, so showing them on the same scale would have left the party rounds line rather hard to glean anything from.

A better approach would probably have been to express the counts as ratios to their 2005 values; they could then have been presented on the same scale.

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