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The analysis about execution quality of VCs gives me validation for being frustrated a huge swathe of the VC industry. The bar is shockingly low. I'm surprised
by yesimahuman 8y ago
The analysis about execution quality of VCs gives me validation for being frustrated a huge swathe of the VC industry. The bar is shockingly low. I'm surprised the long tail gets in any deals at all given how lazy most of their execution is. So many of them are just farming out associates to send spammy drip emails from Salesforce.
This is such a niche market (how many investable companies are there?), I don't see how it works for most of them at all. Every deal we did at Ionic involved a very attentive and responsive partner on the other end, and our first conversation with that firm was always through a partner rather than an associate/analyst.
I suppose we're in a capital bubble and when this long tail comes back with awful returns for their LPs this issue might sort itself out.
- akharris 8y agoI actually see this from a different angle. I think the bar is incredibly high, and that many investors fail to clear it. It is high because, when you see the best investors at work, it is blindingly obvious that they operate in a different way. The strange thing to me is that many investors don't realize this is happening and just coast on the funds they've raised. Founders talk to one another constantly. They know who works hard and who doesn't, and orient themselves accordingly.
- yesimahuman 8y agoGood point. The bar is high to get into great deals, the bar is low to starting a fund right now. And yes, shocking how many investors don't realize or care that founders talk and have long memories!
- snarf21 8y agoI've seen this locally but a lot of investors aren't really in it for a return. They want to talk about being in to everyone at the country club and in their family. It is assets they can (usually) afford to lose. It is the same as buying a lamborghini, they want to be someone. Then if it does manage to hit, "look at what a genius I am".
- achillesheels 8y agoI agree. This mentality only encourages "sexy startups", i.e. those with mass consumer appeal, over more fundamentally sound asset creation, e.g. smart traffic and rail signaling software, which in turn incentivizes entrepreneurs to build sexy startups - which lets be honest are mainly social apps these days - then rinse and repeat.
- EthanHeilman 8y agoDo people actually consider rail signaling software "unsexy"? It's like a router for trains instead of packets. If I was an investor I would much rather brag about my investment in freight train routing infrastructure than a tinder for IoT users app.
- Qworg 8y agoYou're not a typical investor in the described class. Frankly, I suffer from this expectation sometimes too - many things that seem wildly off course make sense from the perspective of the folks driving the ship.
- burfog 8y agoAlso not being an investor, I agree with your ranking. Even better would be any sort of heavy industry. Elon Musk's stuff (rockets, cars, tunnels) is mighty nice. Refineries, 100-ton forges, container ships, and similar are all more impressive than software.
- Alex3917 8y ago> I think the bar is incredibly high, and that many investors fail to clear it. A two-sided lemon market, if you will.
- mathattack 8y agoA very small subset of firms generate almost all the industry cash returns.
- zby 8y agoWhat we need is a Glassdoor for VCs.