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> It is fine for the team from Homejoy to be wild optimists, but not the VC investors. Hmm... I don't know if I agree or disagree. I think a VC's experience mu

> It is fine for the team from Homejoy to be wild optimists, but not the VC investors. Hmm... I don't know if I agree or disagree. I think a VC's experience must be pretty unnerving– she probably turns down seemingly lousy deals and then watches them go on to be staggeringly successful. And that makes her wonder if she's too conservative, maybe. I don't know. I believe that the partners also expect their VCs to take risks, and would rather burn money (which is difficult for common folks like us to relate to) on 100 bad startups than miss out on 1 home run. After all, if the VC screw-ups are not tolerated, the partners will just cut off their money supply. This isn't happening, or hasn't happened yet. Which signals to the VCs to continue taking risks.

danieltillett 11y ago
I would love to be a VC. Someone gives you 100s of millions dollars which you don’t have to give back for 10 years and which you can spend on whatever crazy ideas you like. Just follow the herd and no one will blame you if you lose the lot and if the herd is right you make out like a bandit. It is a game of heads you lose, tails I win.
- mbesto 11y ago
  Except categorically is an awful business to be in. You might not have a job after your first LP, if your LP fails to return. It's an extremely binary business model - you either succeed in the top 10% of all VC funds available or you simply pack up and do something else. That's why you typically see people get into the VC business when money is not an issue for them...fund failure is much easier to stomach.
  - danieltillett 11y ago
    10 years is an awfully long time - if your first and only LP fails oh well - at least it is not your money. Plus if you don’t let any of your companies IPO then no one will know if you have failed or not for a very long time.
- nostrademons 11y ago
  I'm pretty sure I'd hate it. (I had the opportunity a few years back but turned it down because it wasn't the right time to leave Google. Also, my wife is an institutional investor, but in philanthropy and not tech.) Some of the downsides: Your life is consumed by pitch meetings, and you have to say no to the vast majority of them. You have to constantly be out hustling for deal flow. If you miss the wrong startup, you've probably missed your chance to get a return. You are a support role. Your job is to direct resources to the people who actually make things happen, not to make them happen yourself. You don't usually get to build things yourself, and when you do, nobody can know about them. When things go terribly badly, you are frequently on the hook for cleaning them up. Your compensation can be pretty awesome, but your liquidity sucks. Many times, you have to buy into the fund with your own personal money. The fund is locked up for 7-10 years. During this time, you basically can't leave, or if you do, you better be comfortable with someone else calling the shots for a significant portion of your assets. You draw a salary which (if you're not a GP) is fairly generous & adequate but is not going to make you wealthy. The way to get wealthy is off the carry of the fund, which, of course, requires that you got into one of the hot startups of your era. I would much rather be building things. Even if I wanted to get rich managing money, I think that running a hedge fund, doing prop-trading for a big company, or managing the endowment for a pension or university is a much lower stress, higher-return option.
  - danieltillett 11y ago
    This sounds like hard work - I think I might just have to keep running my own business :) Out of curiosity why can’t anyone know that you built something? Do you mean for your own company, or you can’t help your portfolio companies build things?
    - nostrademons 11y ago
      When you build stuff, it's usually to gain a competitive advantage over other firms, and so it's only useful as long as you keep it secret.

danieltillett 11y ago

I would love to be a VC. Someone gives you 100s of millions dollars which you don’t have to give back for 10 years and which you can spend on whatever crazy ideas you like. Just follow the herd and no one will blame you if you lose the lot and if the herd is right you make out like a bandit. It is a game of heads you lose, tails I win.

mbesto 11y ago
Except categorically is an awful business to be in. You might not have a job after your first LP, if your LP fails to return. It's an extremely binary business model - you either succeed in the top 10% of all VC funds available or you simply pack up and do something else. That's why you typically see people get into the VC business when money is not an issue for them...fund failure is much easier to stomach.
- danieltillett 11y ago
  10 years is an awfully long time - if your first and only LP fails oh well - at least it is not your money. Plus if you don’t let any of your companies IPO then no one will know if you have failed or not for a very long time.
nostrademons 11y ago
I'm pretty sure I'd hate it. (I had the opportunity a few years back but turned it down because it wasn't the right time to leave Google. Also, my wife is an institutional investor, but in philanthropy and not tech.) Some of the downsides: Your life is consumed by pitch meetings, and you have to say no to the vast majority of them. You have to constantly be out hustling for deal flow. If you miss the wrong startup, you've probably missed your chance to get a return. You are a support role. Your job is to direct resources to the people who actually make things happen, not to make them happen yourself. You don't usually get to build things yourself, and when you do, nobody can know about them. When things go terribly badly, you are frequently on the hook for cleaning them up. Your compensation can be pretty awesome, but your liquidity sucks. Many times, you have to buy into the fund with your own personal money. The fund is locked up for 7-10 years. During this time, you basically can't leave, or if you do, you better be comfortable with someone else calling the shots for a significant portion of your assets. You draw a salary which (if you're not a GP) is fairly generous & adequate but is not going to make you wealthy. The way to get wealthy is off the carry of the fund, which, of course, requires that you got into one of the hot startups of your era. I would much rather be building things. Even if I wanted to get rich managing money, I think that running a hedge fund, doing prop-trading for a big company, or managing the endowment for a pension or university is a much lower stress, higher-return option.
- danieltillett 11y ago
  This sounds like hard work - I think I might just have to keep running my own business :) Out of curiosity why can’t anyone know that you built something? Do you mean for your own company, or you can’t help your portfolio companies build things?
  - nostrademons 11y ago
    When you build stuff, it's usually to gain a competitive advantage over other firms, and so it's only useful as long as you keep it secret.