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It's both surprising and alarming to me how many VCs cite "emotion" (rather than logic) as a main if not primary factor in their decision to fund a startup or n
by pshin45 13y ago
It's both surprising and alarming to me how many VCs cite "emotion" (rather than logic) as a main if not primary factor in their decision to fund a startup or not. I'd venture (no pun intended) to say that this is the root cause of much of the "politics" and cronyism described by the OP, and I don't think YC is immune to this either.
Sure, we can talk all day about "human nature" and how "those are the rules of the game", but there's gotta be a better way for investors to make funding decisions than "trusting your gut" or "I have a good feeling about this team."
Yes, VC has changed and evolved over the years thanks in part to new institutions like YC, but the overall VC landscape still reminds me way too much of that scene from the based-on-the-book film "Moneyball" where a bunch of old baseball scouts are sitting around a table discussing who to recruit for next season, and they keep recommending players based on fluff and BS like how good a guy looks swinging the bat (vs. actual hitting stats), how confident he looks, how good he he looks with his shirt off, etc.
This all leads me to believe that, while things are getting better, there's still a long ways to go before Silicon Valley and michaelochurch's so-called "VC-istan" can be considered anything close to a true meritocracy.
- hga 13y agoThe problem I see with your complaint is that any early venture funding is a bet on people ("I have a good feeling about this team") and there's no escaping that. The real Moneyball was based on using better metrics to choose players ... in a rigorously constrained game. Starting a business of the sort we're talking about is entirely different, and I see little in the way of opportunities to apply logic to the choosing people question.
- pshin45 13y agoI agree that baseball is easily the most "rigorously constrained game" there is, but I don't think that's reason to dismiss the use of more/better metrics in assessing startup founders and teams. The same argument you make was once used to dismiss the value of metrics in other more free-flowing and less-constrained sports like basketball, but analytics has become a staple of the sport ever since. [1] And since then, advanced metrics have even found their way into Mixed Martial Arts (MMA), of all things. [2] Sure, starting a company is obviously very different from sports and building a sports team, but I don't think it's THAT different. Sports is essentially a simulation of real life, and I think the move to using advanced metrics in startups is inevitable. If you think about it, even startups are a highly constrained and simplified (i.e. smaller-scale, less people, more uniform "path", etc.) version of running a big business. I see no real reason, besides general skepticism, why metrics cannot be used to improve the startup fundraising process. [1] http://en.wikipedia.org/wiki/APBRmetrics http://en.wikipedia.org/wiki/APBRmetrics [2] http://www.sloansportsconference.com/?p=8966 http://www.sloansportsconference.com/?p=8966