4 ms·

I can't reply for nickpinkston, but I suspect what he was getting at is that some practises of VCs could be seen as unethical. If someone is deliberately making

I can't reply for nickpinkston, but I suspect what he was getting at is that some practises of VCs could be seen as unethical. If someone is deliberately making other people's lives unpleasant in order to make themselves rich, most people would regard that as unethical, and that's what VCs are doing if they prevent founders from getting money in order to keep them "hungry".

tptacek 16y ago
They're offering your company money. Their stipulation: the money has to go to the company. The founder can't take it and buy a car (or a wedding). This seems reasonable. The founder is hungry. So are hundreds of thousands of homeless people.
- nickpinkston 16y ago
  We're talking about using this to get peak performance out of your people. You can take the "everyone should be hard as nails forever or they're not a real entrepreneur"-type of position, but I think this is naive.
  - tptacek 16y ago
    That's what we're talking about now, but note that this conversation didn't start out that way. Meanwhile, note two things: first, that you may in reality be a lot more replaceable than you think you are, and second, that you are almost certainly perceived as being a lot more replaceable than you perceive you are. As soon as you sell board seats, the question of your ruthless replacement stops being a moral issue and starts being a business issue. Venture capitalists aren't investing their own money. It is the case that their absolute most important priority is the protection of their investors money.
    - nickpinkston 16y ago
      Were you the founder / CEO of any the funded startups you were involved with? Not an ad hominem, just wondering where you're coming from. I think the fundamental issue here though is that there are massive costs of having an under-performing head founder. Replaceability is a massive risk (bad replacement, moral, public image, learning periods, etc.) compared to what it costs to keep the original CEO happy and driving hard toward the dream - assuming they're good in that position in the first place.
      - tptacek 16y ago
        Equal-equity founder (not referring to my current company, Matasano, which we bootstrapped in 2005).

tptacek 16y ago

They're offering your company money. Their stipulation: the money has to go to the company. The founder can't take it and buy a car (or a wedding). This seems reasonable. The founder is hungry. So are hundreds of thousands of homeless people.

nickpinkston 16y ago
We're talking about using this to get peak performance out of your people. You can take the "everyone should be hard as nails forever or they're not a real entrepreneur"-type of position, but I think this is naive.
- tptacek 16y ago
  That's what we're talking about now, but note that this conversation didn't start out that way. Meanwhile, note two things: first, that you may in reality be a lot more replaceable than you think you are, and second, that you are almost certainly perceived as being a lot more replaceable than you perceive you are. As soon as you sell board seats, the question of your ruthless replacement stops being a moral issue and starts being a business issue. Venture capitalists aren't investing their own money. It is the case that their absolute most important priority is the protection of their investors money.
  - nickpinkston 16y ago
    Were you the founder / CEO of any the funded startups you were involved with? Not an ad hominem, just wondering where you're coming from. I think the fundamental issue here though is that there are massive costs of having an under-performing head founder. Replaceability is a massive risk (bad replacement, moral, public image, learning periods, etc.) compared to what it costs to keep the original CEO happy and driving hard toward the dream - assuming they're good in that position in the first place.
    - tptacek 16y ago
      Equal-equity founder (not referring to my current company, Matasano, which we bootstrapped in 2005).