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The last one I worked at was like this, due to its founder being 19yo and extremely inexperienced. Raised 6M, no customers, no revenue, no product, a buggy, no

The last one I worked at was like this, due to its founder being 19yo and extremely inexperienced. Raised 6M, no customers, no revenue, no product, a buggy, non-functional MVP. 19yo founder was terrified to relinquish control to senior devs because he was scared they would implement something he wouldn’t understand, so the company sat there burning cash making tiny incremental improvements and flip flopping on priorities as the new-shiny whims of the founder changed every few days. I have no idea how he raised 6M, I think it was a combination of lies and FOMO from latter investors. I tried my best to guide him and give advice but his ego was out of control (but only backed by mediocre skill set) so I had to leave when I realised I couldn’t help anymore

rqtwteye 3y ago
It always boggles my mind how these guys are raising that much money without any plan.
- jfengel 3y ago
  It's better without a plan. Plans have risks and foreseeable problems. Handwavey dreams are all upside and no downside. Of course you gotta find the guys with more money than sense. They're not exactly thick on the ground but during a boom cycle there seem to be quite a few. (Often the winners of the last boom cycle, convinced that they were smart rather than lucky.)
- malux85 3y ago
  It also boggles my mind how these investors give money without doing ANY technical due diligence. This company claimed all of its value was in IP (i.e. source code) and it took me 15 minutes of reading the code to see there was nothing unique there, and deep down inside the core was just a bunch of //TODO comments.
cultofmetatron 3y ago
no kidding.. where are these investors?? my company raised a small round e years in. enough to keep us engineers comfortable but no where near 6 million. meanwhile my cofounders have years of experience in financial analysis and running a restaurant while I have 10 years of experience as an engineer before stepping in here as cto and first technical hire. We actually do have traction and getting new customers every day off a product that was self funded. I can't understand investing 6 million on a 19 year old with no experience with an ego fueled by insecurity. A startup needs to be run like a phalanx because there isn't room for redundancy and dead weight. And definitely can't afford to stick to a ego fueled "vision." I trust my cofounders to do their job and they in turn trust me. the "vision" should always be about serving the users and thats pretty easy to quantify if you are willing to humble yourself and engage with them. the good news is we will have more favorable terms when we do a series A. The good thing about starting a startup in a recession is that you're more accountable to making your business actually be something people want.
- mgkimsal 3y ago
  A few years ago, if some angel or 'friend of family' had a few hundred $k sitting around, they were getting 0 return on it. Investing in speculative startup ideas was at least a promise of a return. Now those same startup ideas are going to be competing against 5% no risk return. Some of the ideas like the one referenced above may not see $6m-level funding activity again because of higher rates now.
  - drBonkers 3y ago
    > A few years ago… a few hundred $k sitting around… getting 0 return on it. People say this with poorly invested money all the time, but I must be missing something. You could invest it in an index fund, say the S&P 500, and annually yield over 10% on average [1]. [1] https://www.officialdata.org/us/stocks/s-p-500/2016?amount=100&endYear=2023 https://www.officialdata.org/us/stocks/s-p-500/2016?amount=1...
  - Archelaos 3y ago
    > ... competing against 5% no risk return Until recently, this was less than inflation. A year ago the inflation rate of the US$ was more than 8%. So the net result when applying an interest rate of 5% was -3%. Less than in most of the period before 2021 when assuming an interest rate of 0%. I doubt that investors are not aware of this, arn't they?
  - deleted 3y ago
    [deleted]
- canadianfella 3y ago
  [dead]
liquidpele 3y ago
Investors were probably “found” via friends of daddy.
- asdff 3y ago
  Certain schools are charging people north of 100k in tuition just because they can. Even at the ones that don't you see students driving six figure cars somewhat bizarrely regularly. It's not hard to imagine finding six people whose parents can scrounge up a million in financing, especially if you have sold the kid on your idea and they seem passionate about it as their first big investment.

rqtwteye 3y ago

It always boggles my mind how these guys are raising that much money without any plan.

jfengel 3y ago
It's better without a plan. Plans have risks and foreseeable problems. Handwavey dreams are all upside and no downside. Of course you gotta find the guys with more money than sense. They're not exactly thick on the ground but during a boom cycle there seem to be quite a few. (Often the winners of the last boom cycle, convinced that they were smart rather than lucky.)
malux85 3y ago
It also boggles my mind how these investors give money without doing ANY technical due diligence. This company claimed all of its value was in IP (i.e. source code) and it took me 15 minutes of reading the code to see there was nothing unique there, and deep down inside the core was just a bunch of //TODO comments.

cultofmetatron 3y ago

no kidding.. where are these investors?? my company raised a small round e years in. enough to keep us engineers comfortable but no where near 6 million. meanwhile my cofounders have years of experience in financial analysis and running a restaurant while I have 10 years of experience as an engineer before stepping in here as cto and first technical hire. We actually do have traction and getting new customers every day off a product that was self funded. I can't understand investing 6 million on a 19 year old with no experience with an ego fueled by insecurity. A startup needs to be run like a phalanx because there isn't room for redundancy and dead weight. And definitely can't afford to stick to a ego fueled "vision." I trust my cofounders to do their job and they in turn trust me. the "vision" should always be about serving the users and thats pretty easy to quantify if you are willing to humble yourself and engage with them. the good news is we will have more favorable terms when we do a series A. The good thing about starting a startup in a recession is that you're more accountable to making your business actually be something people want.

mgkimsal 3y ago
A few years ago, if some angel or 'friend of family' had a few hundred $k sitting around, they were getting 0 return on it. Investing in speculative startup ideas was at least a promise of a return. Now those same startup ideas are going to be competing against 5% no risk return. Some of the ideas like the one referenced above may not see $6m-level funding activity again because of higher rates now.
- drBonkers 3y ago
  > A few years ago… a few hundred $k sitting around… getting 0 return on it. People say this with poorly invested money all the time, but I must be missing something. You could invest it in an index fund, say the S&P 500, and annually yield over 10% on average [1]. [1] https://www.officialdata.org/us/stocks/s-p-500/2016?amount=100&endYear=2023 https://www.officialdata.org/us/stocks/s-p-500/2016?amount=1...
- Archelaos 3y ago
  > ... competing against 5% no risk return Until recently, this was less than inflation. A year ago the inflation rate of the US$ was more than 8%. So the net result when applying an interest rate of 5% was -3%. Less than in most of the period before 2021 when assuming an interest rate of 0%. I doubt that investors are not aware of this, arn't they?
- deleted 3y ago
  [deleted]
canadianfella 3y ago
[dead]

liquidpele 3y ago

Investors were probably “found” via friends of daddy.

asdff 3y ago
Certain schools are charging people north of 100k in tuition just because they can. Even at the ones that don't you see students driving six figure cars somewhat bizarrely regularly. It's not hard to imagine finding six people whose parents can scrounge up a million in financing, especially if you have sold the kid on your idea and they seem passionate about it as their first big investment.