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The flaw here is using the wrong metrics. Once a company has found a repeatable and growing business model, it’s trivial to raise money and there’s no reason to
by bactrian 9y ago
The flaw here is using the wrong metrics. Once a company has found a repeatable and growing business model, it’s trivial to raise money and there’s no reason to pick Social Capital over anyone else.
The big market opportunity is to fund startups at the very earliest signs of success. When all they have to show is some code and a few Hacker News upvotes or GitHub stars.
Someone is going to make YCs returns look weak by funding this early. And nothing would do more for diversity than a low barrier test that is 100% blind and meritocratic.
- oh_sigh 9y ago> it’s trivial to raise money Perhaps, but social capital may require giving away less of the farm to do it.
- AznHisoka 9y agoso which metrics are the right ones to look at?
- thrill 9y agoWell, that's the billion dollar secret.
- bactrian 9y agoSocial metrics. Would make the Social Capital name genuinely meaningful :-) The “social response” (HN, GitHub, reddit, ...) to a new project, product, or service is all you should need to predict success at a high enough rate to do extremely well. It’s not a matter of difficulty so much as conviction and intelligence.
- AznHisoka 9y agoThere are many products that have never launched at hacker news or reddit.
- mikikian 9y agoThey elude to it in these blog posts: https://medium.com/swlh/diligence-at-social-capital-part-1-accounting-for-user-growth-4a8a449fddfc https://medium.com/swlh/diligence-at-social-capital-part-1-a... https://medium.com/swlh/diligence-at-social-capital-part-2-accounting-for-revenue-growth-551fa07dd972 https://medium.com/swlh/diligence-at-social-capital-part-2-a... https://medium.com/@jonathanhsu/diligence-at-social-capital-part-3-cohorts-and-revenue-ltv-ab65a07464e1 https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/@jonathanhsu/diligence-at-social-capital-part-4-cohorts-and-engagement-ltv-80b4fa7f8e41 https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/@jonathanhsu/diligence-at-social-capital-part-5-depth-of-usage-and-quality-of-revenue-b4dd96b47ca6 https://medium.com/@jonathanhsu/diligence-at-social-capital-... https://medium.com/swlh/diligence-at-social-capital-epilogue-introducing-the-8-ball-and-gaap-for-startups-7ab215c378bc#.wxc2lc8dp https://medium.com/swlh/diligence-at-social-capital-epilogue...
- chrisweekly 9y agoallude. totally different word.
- dangerlibrary 9y agoMany people on HN do not speak English natively. Consider being a bit gentler when you correct someone :)
- EGreg 9y agoFrom my experience, most of it is about connections. I have seen $41 MM thrown at startups like Color and them failing a month later! Why just recently, FileCoin raised tens of millions from VCs, before goong on to raise $200 MM from crypto holders around the world for a product that hasn't even been developed, in a space where MaidSafe and IPFS etc. already exist. How? Because it was touted by CoinList, started by among others AngelList founder Naval Ravikant who has all the connections.
- bactrian 9y agoConnections matter mostly before. Once you have a rapidly growing business, everyone is your friend, and “connections” fly in.
- danielmorozoff 9y agoFilecoin vc deal was the best imho executed vc play I have seen in a while. for 50m with a discount they were able to sell approx 200m to coin buyers. This not only offset their risk but literally gave the x4 in raw cash infusion in 2 weeks, growing the valuation without any time and this was done all on vc reputation/ name recognition/ and hype building. Very well done...
- woah 9y agoFilecoin is made by the people who made IPFS, and it is an incentivization system for IPFS. Maidsafe has been around for more than 10 years and has yet to launch, and it’s unclear what exactly it does and if it even competes with Filecoin at all.