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All you need to know about most VCs: they have money, end of story. Doesn't automatically mean that they have any particularly insight into business, competitio

by jgeada 10y ago

All you need to know about most VCs: they have money, end of story. Doesn't automatically mean that they have any particularly insight into business, competition, technology, etc. They may have some insider information and connections, primarily because of the money; but it doesn't mean that those will be played to your advantage. Anybody can win a lottery and have money, but you don't immediately assume a lottery winner has any particular insight about money making or business. Just because the lottery is different doesn't change that property.

johnwheeler 10y ago
Many shoot an arrow and paint a bullseye around it. There's a story Charlie Munger tells about the Shoe Button Prince. The Prince had cornered the market on shoe buttons in the 1920's. Shoe buttons were smallish ornaments one put on their shoes. From his success with the buttons, he extrapolated he could pontificate on any and all things--even those outside the realm of shoe buttons. That's your typical VC.
mathattack 10y ago
In most investments (stocks, mutual funds, etc) winners in one period don't extend to another, and certainly not over the long term. VCs are the exception. The best VCs do seem to outperform over time. (Most don't though) Some of it is self-fulfilling: they get the best deals, and are the least likely to get screwed over by short term thinkers. I believe that some of it is also to judgment. Should you listen to someone just because they have capital? No. Should you listen to someone because they've got an insanely high batting average guiding startups? Yes. If you have one of the All Stars, by all means take what they say seriously.
20yrs_no_equity 10y ago
You're right it doesn't automatically mean they have any particular insight into business, competition or technology. In my experience founders thinking they do is half the problem. Them thinking they do, and using the weight of their money, and signaling like "well, maybe we won't participate in the next round..." to influence the course of your business is the other half of the problem.
dang 10y ago
> All you need to know about most VCs: they have money, end of story. This is the sort of reductionist dismissal that we need less of on Hacker News, regardless of how one feels about VCs. That applies even if you're 100% correct that none of them know what they're doing. Reflexive denunciations devoid of substance are incompatible with (indeed destructive of) the things we do want in HN threads—thoughtful critique and concrete experience—so it's important to inhibit the impulse to post like this.

by jgeada 10y ago

johnwheeler 10y ago

Many shoot an arrow and paint a bullseye around it. There's a story Charlie Munger tells about the Shoe Button Prince. The Prince had cornered the market on shoe buttons in the 1920's. Shoe buttons were smallish ornaments one put on their shoes. From his success with the buttons, he extrapolated he could pontificate on any and all things--even those outside the realm of shoe buttons. That's your typical VC.

mathattack 10y ago

In most investments (stocks, mutual funds, etc) winners in one period don't extend to another, and certainly not over the long term. VCs are the exception. The best VCs do seem to outperform over time. (Most don't though) Some of it is self-fulfilling: they get the best deals, and are the least likely to get screwed over by short term thinkers. I believe that some of it is also to judgment. Should you listen to someone just because they have capital? No. Should you listen to someone because they've got an insanely high batting average guiding startups? Yes. If you have one of the All Stars, by all means take what they say seriously.

20yrs_no_equity 10y ago

You're right it doesn't automatically mean they have any particular insight into business, competition or technology. In my experience founders thinking they do is half the problem. Them thinking they do, and using the weight of their money, and signaling like "well, maybe we won't participate in the next round..." to influence the course of your business is the other half of the problem.

dang 10y ago

> All you need to know about most VCs: they have money, end of story. This is the sort of reductionist dismissal that we need less of on Hacker News, regardless of how one feels about VCs. That applies even if you're 100% correct that none of them know what they're doing. Reflexive denunciations devoid of substance are incompatible with (indeed destructive of) the things we do want in HN threads—thoughtful critique and concrete experience—so it's important to inhibit the impulse to post like this.