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“Entrepreneurs get distracted by fundraising, so I just did that part first." It is like a Hollywood diva saying (after getting into the 'circles'): "Women's h

by nadam 15y ago

“Entrepreneurs get distracted by fundraising, so I just did that part first." It is like a Hollywood diva saying (after getting into the 'circles'): "Women's hands get ugly because of the lot of washing and cleaning, so I've bought myself people to do that for me. What matters is how great I am: I can do this because I am great." Venture capitalists are a parody of themselves. You have to have social proof, or you have to be already profitable to gain their attention. Basically they give money to people who do not need it.

deleted 15y ago
[deleted]
_delirium 15y ago
A closer comparison is probably novelists, but yes, the same "only works if you're famous" applies there. If you're Stephen King, you can get a book contract and advance royalties without a manuscript or even a concept, but that's not the common case.
diego 15y ago
VCs are more likely to give money to entrepreneurs who are already rich. There's a good reason for it: VCs (unlike angels) need home runs. Over the course of 10 years, a VC must catch a Facebook, a Google or at least a Twitter in order to be successful. A rich founder is less likely to take an early exit, and more likely to want to swing for the fences. Think of @ev refusing to sell Twitter to Google as an example. Also, an already successful entrepreneur is less risky from a VC standpoint. He was able to endure the process of taking a startup from zero to something. He's more likely to have "what it takes" to succeed. That said, this guy is not acting rationally by flaunting his ability to raise money. Like he admits, he doesn't have a team yet. My due diligence in applying for a job as an early employee would uncover this article, and it would be a red flag concerning the personality of a potential boss.
- anamax 15y ago
  Are "already successful" more or less likely to hit home runs? I don't know the answer. Netflix, redfin, and twitter are 2nd acts by "already successful" folk. Yahoo, HP, Amazon, Google, Disney, Apple, Cisco are by first-timers. (Disney had several failures under his belt.) I don't know about Walmart. Sam Walton had been a regional manager for another chain but I don't know for sure that he hadn't been a "successful entrepreneur".
  - diego 15y ago
    That's survivor bias. The set of already successful entrepreneurs is much smaller than the set of first-time entrepreneurs. To answer your question you want the distribution of outcomes for both sets. VCs have to have good estimates of that data.

by nadam 15y ago

deleted 15y ago

[deleted]

_delirium 15y ago

A closer comparison is probably novelists, but yes, the same "only works if you're famous" applies there. If you're Stephen King, you can get a book contract and advance royalties without a manuscript or even a concept, but that's not the common case.

diego 15y ago

VCs are more likely to give money to entrepreneurs who are already rich. There's a good reason for it: VCs (unlike angels) need home runs. Over the course of 10 years, a VC must catch a Facebook, a Google or at least a Twitter in order to be successful. A rich founder is less likely to take an early exit, and more likely to want to swing for the fences. Think of @ev refusing to sell Twitter to Google as an example. Also, an already successful entrepreneur is less risky from a VC standpoint. He was able to endure the process of taking a startup from zero to something. He's more likely to have "what it takes" to succeed. That said, this guy is not acting rationally by flaunting his ability to raise money. Like he admits, he doesn't have a team yet. My due diligence in applying for a job as an early employee would uncover this article, and it would be a red flag concerning the personality of a potential boss.

anamax 15y ago
Are "already successful" more or less likely to hit home runs? I don't know the answer. Netflix, redfin, and twitter are 2nd acts by "already successful" folk. Yahoo, HP, Amazon, Google, Disney, Apple, Cisco are by first-timers. (Disney had several failures under his belt.) I don't know about Walmart. Sam Walton had been a regional manager for another chain but I don't know for sure that he hadn't been a "successful entrepreneur".
- diego 15y ago
  That's survivor bias. The set of already successful entrepreneurs is much smaller than the set of first-time entrepreneurs. To answer your question you want the distribution of outcomes for both sets. VCs have to have good estimates of that data.