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I suspect only founders with lower-than-average confidence in their own companies would choose a bit of diversification over a better deal for their company els
by gyardley 12y ago
I suspect only founders with lower-than-average confidence in their own companies would choose a bit of diversification over a better deal for their company elsewhere. I wonder if that could create an adverse selection effect. Maybe I'm misremembering, but wasn't that the main problem with First Round Capital's exchange fund?
That said, Kent's a great guy to work with - if you don't like his experimental fund structure, the opportunity to work with him should more than make up for it.
- kentgoldman 12y agoEverything comes out of the fund's carry. Founders give up nothing. We want to work with founders who believe they will each be creating the most impactful company in the portfolio. But this is about much more than diversification, it's about the community that forms when the founders have an interest in one another's success.
- davemel37 12y agoI am no expert, but do you think this will create, "too many chefs in the kitchen?" In my experience, buying love is not nearly as effective as winning it. When a founder helps a fellow company out of the goodness of their hearts or just for Karma, or with hopes of reciprocity, that help will likely be more valuable than a bunch of founders who feel somewhat invested in the other companies and maybe think they know better. I think this is an interesting experiment...but I wonder how this will actually play out. I can see it having the exact opposite effect you are hoping for.