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If there is one thing I wish I saw more of on HN, it's posts about funding and business outside of the VC model. I feel the thoughts expressed in this post are
by mvzink 14y ago
If there is one thing I wish I saw more of on HN, it's posts about funding and business outside of the VC model. I feel the thoughts expressed in this post are on the rise.
- acgourley 14y agoI'd like to see analysis that suggested if traditional VCs have it right or not. Yes, yes, startup returns follow a power law distribution, I agree. That doesn't necessarily mean that it's optimal to chase the potential top companies!
- aaronblohowiak 14y ago"Shotgun" angels take a different strategy.. Edit: also, if you think about the YC acceptance rate vs the VC acceptance rate in terms of attempts to money, then it is interesting that VCs consider YC a filter. IIRC, YC has a higher acceptance rate than most top-tier VCs. Note that i probably don't remember correctly ;)
- jjacobson 14y agoAgreed. It's fascinating and confusing to learn about the difference between VC's and Angels, especially when you have VC's acting like Angels and making smaller, seed round investments these days.
- aaronblohowiak 14y agoVCs make more money because they have more money under management, but angel investments are so much cheaper because of lower due diligence... VCs may also be making angel investments not so much for the equity but in order to have a shoe in the door in order to have a "right of first refusal" (implied/socially) in later financing rounds. Unfortunately (as some are learning) this can also mean you make some less-desirable angel investments that would create a portfolio conflict with a desire to do a later round with a competitor in the space... this is why some VCs might have an "angel arm" or similar "separate" structure so they get the best of both worlds...