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VC's won't invest in competitors - how would you give advice/counsel? Hmm. YC does, and it seems to work ok. Why wouldn't it work for later stage VCs? Or rathe

VC's won't invest in competitors - how would you give advice/counsel? Hmm. YC does, and it seems to work ok. Why wouldn't it work for later stage VCs? Or rather, why does it work for YC?

fragsworth 13y ago
I'm going to take a guess here. YC doesn't have to give up the best of its limited resources to competing startups. They just help get you to a Series A round. They can do this for competing companies without any issues. VC's help assemble an executive team, provide critical business relationships, etc., and it's not in anyone's interests if they have to divide their best contacts and resources between two competing companies. They should want to go all-out in providing one company all their best resources.
mattzito 13y ago
YC deals with people at such an earlier stage that a lot of their advice and hand-holding is more generic - how to get a product out the door, how to improve user conversions, how to attract quality talent - these are examples of isuses that are universal, so having (some) competitors isn't too much of a conflict. A later-stage VC, though, you might be having conversations with portfolio company A about how to entice sales people from portfolio company B, or portfolio company B might be getting ready to expand internationally and you're advising them on the best way to capture market share in Asia, where company A is stronger. It's much more specific, targeted advice and consultation vs. "here's how we're going to help you get off the ground"
loumf 13y ago
I think there might be a disclosure requirement or perhaps it only matters if they take board seats or what kind of access they have to internal matters. At latter stages it might arise if a company pivots into another space. See this on how Andreessen-Horowitz dealt with a conflict (Instagram v. PicPlz): http://bhorowitz.com/2012/04/22/instagram/ http://bhorowitz.com/2012/04/22/instagram/

VC's won't invest in competitors - how would you give advice/counsel? Hmm. YC does, and it seems to work ok. Why wouldn't it work for later stage VCs? Or rather, why does it work for YC?

fragsworth 13y ago

I'm going to take a guess here. YC doesn't have to give up the best of its limited resources to competing startups. They just help get you to a Series A round. They can do this for competing companies without any issues. VC's help assemble an executive team, provide critical business relationships, etc., and it's not in anyone's interests if they have to divide their best contacts and resources between two competing companies. They should want to go all-out in providing one company all their best resources.

mattzito 13y ago

YC deals with people at such an earlier stage that a lot of their advice and hand-holding is more generic - how to get a product out the door, how to improve user conversions, how to attract quality talent - these are examples of isuses that are universal, so having (some) competitors isn't too much of a conflict. A later-stage VC, though, you might be having conversations with portfolio company A about how to entice sales people from portfolio company B, or portfolio company B might be getting ready to expand internationally and you're advising them on the best way to capture market share in Asia, where company A is stronger. It's much more specific, targeted advice and consultation vs. "here's how we're going to help you get off the ground"

loumf 13y ago

I think there might be a disclosure requirement or perhaps it only matters if they take board seats or what kind of access they have to internal matters. At latter stages it might arise if a company pivots into another space. See this on how Andreessen-Horowitz dealt with a conflict (Instagram v. PicPlz): http://bhorowitz.com/2012/04/22/instagram/ http://bhorowitz.com/2012/04/22/instagram/