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I think the “problem” here isn’t one big problem with a single process (VCs throwing money on bad ideas), but rather a combination of issues that together resul
by arielm 9y ago
I think the “problem” here isn’t one big problem with a single process (VCs throwing money on bad ideas), but rather a combination of issues that together result in so much failure.
There’s a lot of venture money out there, and like some other comments mentioned it needs to _do_ something - and that’s good. We as founders and consumers want to see that money do something. But...
It needs to do something meaningful. I believe that responsibility lies in the hands of those that give it. Bad ideas are merely potential opportunities, but bad business plans, founders with short term vision, and lack of discipline make this into a real problem.
So many companies can prove their model without big money. Yet, because investors are hoping for a home run those founders jump right into the deep end.
I don’t want to say getting money needs to be harder, because ultimately that could slow down innovation. I do however believe investors need to raise the bar for founders.
- pm90 9y agoThis is a good point. Investors really need to be smarter about deciding which people to invest with. I think they also need to be more creative. YC seems to be the only VC firm that is actively funding creative ideas, different strategies etc. instead of simply a "take this cash and give me stock" strategy (of course I'm being hyperbolic about the latter, but it seems that YC is definitely trying a lot more than conventional VC firms).
- m-j-fox 9y agoAgreed. But more specifically, how can VCs be more discriminating and also not make getting money harder? There was another thread today about an interview with some rockstar VC and his wisdom was: invest in ideas that sound stupid, but turn out not to be. I mean, here I've been trying to not sound stupid in front of investors and it's been holding me back.
- arielm 9y agoI think that’s a terrible oversimplification... I think requiring a more thought out business plan (ie. one that includes steps to turn profit within some timeframe). Some investors I’ve met do this and do it well, while still investing in ideas that may not seem all there upfront.
- andrewflnr 9y agoI'm guessing it's a matter of making it harder for some and easier for others, in a way that makes the "total difficulty" stay the same.