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Add TechStars to the list of accelerators to be avoided at all costs. They make an investment in your company on terms they can claw back the money at any time.

Add TechStars to the list of accelerators to be avoided at all costs. They make an investment in your company on terms they can claw back the money at any time. Most of these accelerators provide little to no value, in my experience. Unless you need to know what “product market fit” means. Hilarious.

moralestapia 2y ago
Most VCs add zero value aside from the money. Bootstrapping is always better, if you can do it, of course. Exhibit A: Naval Ravikant, the flagship SV investor, widely regarded to as "a wise man", just released a kind of crappy messaging app that flopped. Imagine having unlimited leverage, unlimited money, unlimited reputation, a huge audience already in place and still that not being enough to put out a competent product. Now imagine this guy asking for 20-30% of your company equity in exchange for "advice", lol.
- ldjkfkdsjnv 2y ago
  If the advice was a slam dunk they would just start the company. There are too many factors for it to be useful, and they know that. Theres too much nuance
- MichaelZuo 2y ago
  I've seen this 'Naval' on Twitter, or now X, but there's hundreds of accounts with that shtick, catering to various groups, so it seems doubtful. Are you sure he was 'the flagship SV investor, widely regarded...' among serious SV folks? Or just among the peanut gallery?
- dtnewman 2y ago
  No one gives away 20% of a company for advice. He gives them capital. Hopefully connections. And founders can take or leave the advice. Anyway, he is a successful entrepreneur having built AngelList. Sure, maybe he isn’t Midas, but a single failure in a startup doesn’t make someone an idiot. But assuming you are referring to AirChat, it seems too early to call it a failure anyway.
  - moralestapia 2y ago
    >No one gives away 20% of a company for advice. You'd be surprised at how common that is. Wouldn't you be inclined to believe that @naval wouldn't want to use that capital, connections and whatnot to support the single project of its own authorship in its lifetime? The results speak for themselves. I have another theory, VCs freeride on the success and luck of other people's projects, which (sometimes) are so good and so profitable that they can even afford to have someone leeching off them. Just look at how many stories are there where the founders end up with zilch and regret ever taking VC money. Any of the random guys on Twitter that are building and shipping stuff and making 4-5 figures on their side projects is worth more than a 1,000 Denpoks sharing their "wisdom" with you.
    - deleted 2y ago
      [deleted]
    - gfourfour 2y ago
      This is kind of a confusing perspective considering VCs are giving you money to pay for the operations of your business. Money is money no matter how stupid the giver is, their money won’t leech value from your company itself. As for founders ending up with nothing, in those cases their investors ended up with much much less than they were hoping to too. Plus there’s plenty of other cases where founders get rich off a worthless company because of the beneficence of VCs.
      - knappe 2y ago
        >>Money is money no matter how stupid the giver is, their money won’t leech value from your company itself. Yeah, this isn't true for a number of reasons. 1) The money you accept is given in trade for a percentage of the company and that means influence in the company. That influence almost always comes in the form of board seats which literally drive the direction of the company. I've seen many successful companies do some really stupid things because the investors wanted it that way and it actively hurt the business. 2) Certain investors come with a set of prestige. You're the n a forum which is known for just that. Who you take money from certainly matters.
- nl 2y ago
  > just released a kind of crappy messaging app that flopped. I don't think releasing a messaging app that flops is bad? If getting a messaging app to succeed was easy then there would be more successes at it.
  - IncreasePosts 2y ago
    Hell, google has released about 30 and 33 have failed
    - hobobaggins 2y ago
      I just re-read your post and caught it - thank you, made my evening!
  - drewcoo 2y ago
    > I don't think releasing a messaging app that flops is bad? For an exec, it's a "learning experience." Most startups fail. Take the VC cash, fail, and "learn" on their dime. For any employee, it's s short stint to list on a resume that will make them less attractive to recruiters for the rest of their careers. "Why were you only at FooBarCorp for Baz months?" (Oh, wonderful - how do I explain without throwing anyone under the bus?)
    - nl 2y ago
      > For any employee, it's s short stint to list on a resume that will make them less attractive to recruiters for the rest of their careers. If you can't make the story about working on Navel's messaging app a win for your career then your resume is probably going to have other problems.
- ilrwbwrkhv 2y ago
  Ya I do not know why people hold Naval up so high. What has he ever done?
  - arbuge 2y ago
    He cofounded AngelList for one...
- morgante 2y ago
  Startups are incredibly hard. If Airchat "flopped" it still got way more usage than most bootstrapped startups ever see.
  - moomoo11 2y ago
    Can you explain why? Are you suggesting he used the money on marketing instead of product? I don’t know too many bootstrapped companies that are billion dollar plus but most well run bootstrapped companies can end up becoming successful small and mid level companies that make a decent money. At least from a revenue:num_employees, can’t be capital intensive so they have to be profitable from early on. Pls explain I’m interested to learn thanx
    - morgante 2y ago
      > Are you suggesting he used the money on marketing instead of product? No, a lot of the marketing/hype just came from Naval and other influencers on Twitter. > most well run bootstrapped companies can end up becoming successful small and mid level companies that make a decent money "well run" is doing a lot of work here, but: - Most bootstrapped companies fail, period. - Most of them fail without anyone ever noticing they existed. It's very hard to break through the noise, and I know lots of companies/projects that failed without ever getting more than a handful of users.
      - moomoo11 2y ago
        I see. Thanks! And how does VC help? Is it just the capital infusion or something else
- langsoul-com 2y ago
  The entire point of a vc is to fund many and hope a success works out. Read on what Paul Graham said about ycomb, have shit tons of people dig holes to find treasure.
- jerrygenser 2y ago
  He co-founded angellist which seems to be at least a moderate success
- simonebrunozzi 2y ago
  Caution. You might end up like the Dropbox guy... [0] [0]: https://news.ycombinator.com/item?id=9224 https://news.ycombinator.com/item?id=9224
fuzzythinker 2y ago
Any source to your avoid TechStars advice?
- chambers 2y ago
  This piece goes into some detail: https://www.founderscoop.com/2024/what-went-wrong-at-techstars/ https://www.founderscoop.com/2024/what-went-wrong-at-techsta.... An erudite and incisive autopsy of a disintegrating accelerator. I'm no longer in the startup scene so I can't vouch for its facts, however.
  - fuzzythinker 2y ago
    > https://www.founderscoop.com/2024/what-went-wrong-at-techsta https://www.founderscoop.com/2024/what-went-wrong-at-techsta... Thank you, it's what I'm looking for to understand why.
- threeseed 2y ago
  The other problem with advice is that TechStars operates like a franchise. So you don't know which of the many accelerators are problematic or not or what their incentives are.
  - avarun 2y ago
    Not anymore. They switched to a centralized model under their new CEO.
xpl 2y ago
> They make an investment in your company on terms they can claw back the money at any time It is a loan then, not an investment.
- IncreasePosts 2y ago
  Even worse - loans can't usually be clawed back at any time
  - singleshot_ 2y ago
    Perhaps this is what you meant by usually, but otherwise I suggest reading the fine print on your home line of credit, if you have one.
  - withinboredom 2y ago
    Nearly all loans I have seen have a provision in the contract that the entire loan can be called at any time.
    - bratwurst3000 2y ago
      Is this a American thing?
      - justinclift 2y ago
        Seems to be common in at least western countries.
        brianoconnor 2y ago
        Defo not the case here for consumer loans. A German bank cannot tell you to pay back a loan earlier than agreed on in the contract.
        johnhaltonx21 2y ago

moralestapia 2y ago

Most VCs add zero value aside from the money. Bootstrapping is always better, if you can do it, of course. Exhibit A: Naval Ravikant, the flagship SV investor, widely regarded to as "a wise man", just released a kind of crappy messaging app that flopped. Imagine having unlimited leverage, unlimited money, unlimited reputation, a huge audience already in place and still that not being enough to put out a competent product. Now imagine this guy asking for 20-30% of your company equity in exchange for "advice", lol.

ldjkfkdsjnv 2y ago
If the advice was a slam dunk they would just start the company. There are too many factors for it to be useful, and they know that. Theres too much nuance
MichaelZuo 2y ago
I've seen this 'Naval' on Twitter, or now X, but there's hundreds of accounts with that shtick, catering to various groups, so it seems doubtful. Are you sure he was 'the flagship SV investor, widely regarded...' among serious SV folks? Or just among the peanut gallery?
dtnewman 2y ago
No one gives away 20% of a company for advice. He gives them capital. Hopefully connections. And founders can take or leave the advice. Anyway, he is a successful entrepreneur having built AngelList. Sure, maybe he isn’t Midas, but a single failure in a startup doesn’t make someone an idiot. But assuming you are referring to AirChat, it seems too early to call it a failure anyway.
- moralestapia 2y ago
  >No one gives away 20% of a company for advice. You'd be surprised at how common that is. Wouldn't you be inclined to believe that @naval wouldn't want to use that capital, connections and whatnot to support the single project of its own authorship in its lifetime? The results speak for themselves. I have another theory, VCs freeride on the success and luck of other people's projects, which (sometimes) are so good and so profitable that they can even afford to have someone leeching off them. Just look at how many stories are there where the founders end up with zilch and regret ever taking VC money. Any of the random guys on Twitter that are building and shipping stuff and making 4-5 figures on their side projects is worth more than a 1,000 Denpoks sharing their "wisdom" with you.
  - deleted 2y ago
    [deleted]
  - gfourfour 2y ago
    This is kind of a confusing perspective considering VCs are giving you money to pay for the operations of your business. Money is money no matter how stupid the giver is, their money won’t leech value from your company itself. As for founders ending up with nothing, in those cases their investors ended up with much much less than they were hoping to too. Plus there’s plenty of other cases where founders get rich off a worthless company because of the beneficence of VCs.
    - knappe 2y ago
      >>Money is money no matter how stupid the giver is, their money won’t leech value from your company itself. Yeah, this isn't true for a number of reasons. 1) The money you accept is given in trade for a percentage of the company and that means influence in the company. That influence almost always comes in the form of board seats which literally drive the direction of the company. I've seen many successful companies do some really stupid things because the investors wanted it that way and it actively hurt the business. 2) Certain investors come with a set of prestige. You're the n a forum which is known for just that. Who you take money from certainly matters.
nl 2y ago
> just released a kind of crappy messaging app that flopped. I don't think releasing a messaging app that flops is bad? If getting a messaging app to succeed was easy then there would be more successes at it.
- IncreasePosts 2y ago
  Hell, google has released about 30 and 33 have failed
  - hobobaggins 2y ago
    I just re-read your post and caught it - thank you, made my evening!
- drewcoo 2y ago
  > I don't think releasing a messaging app that flops is bad? For an exec, it's a "learning experience." Most startups fail. Take the VC cash, fail, and "learn" on their dime. For any employee, it's s short stint to list on a resume that will make them less attractive to recruiters for the rest of their careers. "Why were you only at FooBarCorp for Baz months?" (Oh, wonderful - how do I explain without throwing anyone under the bus?)
  - nl 2y ago
    > For any employee, it's s short stint to list on a resume that will make them less attractive to recruiters for the rest of their careers. If you can't make the story about working on Navel's messaging app a win for your career then your resume is probably going to have other problems.
ilrwbwrkhv 2y ago
Ya I do not know why people hold Naval up so high. What has he ever done?
- arbuge 2y ago
  He cofounded AngelList for one...
morgante 2y ago
Startups are incredibly hard. If Airchat "flopped" it still got way more usage than most bootstrapped startups ever see.
- moomoo11 2y ago
  Can you explain why? Are you suggesting he used the money on marketing instead of product? I don’t know too many bootstrapped companies that are billion dollar plus but most well run bootstrapped companies can end up becoming successful small and mid level companies that make a decent money. At least from a revenue:num_employees, can’t be capital intensive so they have to be profitable from early on. Pls explain I’m interested to learn thanx
  - morgante 2y ago
    > Are you suggesting he used the money on marketing instead of product? No, a lot of the marketing/hype just came from Naval and other influencers on Twitter. > most well run bootstrapped companies can end up becoming successful small and mid level companies that make a decent money "well run" is doing a lot of work here, but: - Most bootstrapped companies fail, period. - Most of them fail without anyone ever noticing they existed. It's very hard to break through the noise, and I know lots of companies/projects that failed without ever getting more than a handful of users.
    - moomoo11 2y ago
      I see. Thanks! And how does VC help? Is it just the capital infusion or something else
langsoul-com 2y ago
The entire point of a vc is to fund many and hope a success works out. Read on what Paul Graham said about ycomb, have shit tons of people dig holes to find treasure.
jerrygenser 2y ago
He co-founded angellist which seems to be at least a moderate success
simonebrunozzi 2y ago
Caution. You might end up like the Dropbox guy... [0] [0]: https://news.ycombinator.com/item?id=9224 https://news.ycombinator.com/item?id=9224

fuzzythinker 2y ago

Any source to your avoid TechStars advice?

chambers 2y ago
This piece goes into some detail: https://www.founderscoop.com/2024/what-went-wrong-at-techstars/ https://www.founderscoop.com/2024/what-went-wrong-at-techsta.... An erudite and incisive autopsy of a disintegrating accelerator. I'm no longer in the startup scene so I can't vouch for its facts, however.
- fuzzythinker 2y ago
  > https://www.founderscoop.com/2024/what-went-wrong-at-techsta https://www.founderscoop.com/2024/what-went-wrong-at-techsta... Thank you, it's what I'm looking for to understand why.
threeseed 2y ago
The other problem with advice is that TechStars operates like a franchise. So you don't know which of the many accelerators are problematic or not or what their incentives are.
- avarun 2y ago
  Not anymore. They switched to a centralized model under their new CEO.

xpl 2y ago

> They make an investment in your company on terms they can claw back the money at any time It is a loan then, not an investment.

IncreasePosts 2y ago
Even worse - loans can't usually be clawed back at any time
- singleshot_ 2y ago
  Perhaps this is what you meant by usually, but otherwise I suggest reading the fine print on your home line of credit, if you have one.
- withinboredom 2y ago
  Nearly all loans I have seen have a provision in the contract that the entire loan can be called at any time.
  - bratwurst3000 2y ago
    Is this a American thing?
    - justinclift 2y ago
      Seems to be common in at least western countries.
      - brianoconnor 2y ago
        Defo not the case here for consumer loans. A German bank cannot tell you to pay back a loan earlier than agreed on in the contract.
        johnhaltonx21 2y ago