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If you an engineer at a VC, their jobs would be due dilligence to check how much of a startup is smoke and mirrors. Much of it is, so you want to know if it's 5
by ClumsyPilot 5y ago
If you an engineer at a VC, their jobs would be due dilligence to check how much of a startup is smoke and mirrors. Much of it is, so you want to know if it's 50% or 90%
Checking that their product is being built with Kafka or whatever is worthless - you cam throw money at that problem later and fix it.
- btmills 5y agoI lead engineering at a VC firm, and while we do sometimes help in diligence, it’s a tiny portion of our time, <1%. Your second paragraph is spot on, and I hinted at a similar idea in a sibling to your comment. Especially at series A and later, customers are an existence proof for the product not being vaporware. So when we are involved in diligence, it’s usually near the end, and we’re getting to know the engineering leaders to see if we can help them speedrun a few iterations by sharing best practices or introducing them to other leaders in the portfolio who have been there and done that recently.
- raffraffraff 5y agoWhat if they're series F and are burning €1m per month on infrastructure because it's badly designed, and haven't yet turned a profit? Maybe VCs really do have billions to slosh around... Didn't a start-up go under recently for that very reason?
- btmills 5y agoWe typically invest at earlier stages, so I can't say firsthand what diligence looks like at series F. If you mean Fast, Gergely Orosz had a good writeup at https://newsletter.pragmaticengineer.com/p/the-scoop-fast https://newsletter.pragmaticengineer.com/p/the-scoop-fast. Sounds like that was more attributable to hiring ahead of revenue than infrastructure spend.