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The question is why won't they touch it. Unrealistic expectations of high returns kill deals too. I'd be more than happy to start funding deals with high prob
by RockIslandLine 6y ago
The question is why won't they touch it. Unrealistic expectations of high returns kill deals too.
I'd be more than happy to start funding deals with high probabilities of low-to-medium returns. And I know for a fact that those deals exist at the small scale.
- tptacek 6y agoPeople say this a lot but it's worth questioning, because the "unrealistic expectations" also make the portfolio math work, and if the math doesn't work, not liking the expectations doesn't turn a broken investment into a viable one. You can do a really superficial analysis in 5 minutes of Google Sheets to work this out for yourself, and at least crystallize your implicit expectations about the number of companies in your portfolio you expect to be profitable in N years as opposed to dead and gone.
- renewiltord 6y agoI vaguely remember in the Startup podcast that Gimlet Media went to non-VCs before VCs would get in on their thing. And they did eventually do a $200k crowdfunding campaign. So clearly the argument "No VC = Scam" doesn't work. I do buy that the scam rate may be higher. But I think allowing yourself to be scammed some amount is probably okay.
- BobbyJo 6y agoDidn't they have a poor outcome? I feel like the only reason VCs got involved eventually was FOMO, not a solid thesis.
- renewiltord 6y agoSPOILERS! Just kidding, I haven't reached the end (stopped when they started doing other startups) so I don't know how they ended up. Looking it up, looks like they sold to Spotify. I wonder if the deal was good.
- askafriend 6y agoGimlet was not a good outcome. They sold because they had to - they had nowhere else to go.
- tptacek 6y agoIt does not appear to have been a bad outcome for the crowdfunding investors.