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I think entrepreneurs had more leverage in the '90s. In 2009, with the economy in such a damaged state, VCs know that entrepreneurs would be in severe pain if

I think entrepreneurs had more leverage in the '90s. In 2009, with the economy in such a damaged state, VCs know that entrepreneurs would be in severe pain if they entered the traditional labor market right now, and they're using this as leverage. Taking the $120k job at mid-size, promising startup is not an option for as many people right now. Knowledge (of VC tactics, terms) doesn't help the entrepreneur very much. This is about power, not knowledge. Everyone knows that multiple liquidation preferences are evil, but how many people are going to select death over bad terms?

grellas 17y ago
Of course, during the bubble, the leverage shifted greatly in favor of entrepreneurs. The main advantage today for entrepreneurs (if their business model allows it) is to use bootstrap/angel-based methods of working around the VCs while building the core parts of their companies and dealing with VCs later, if at all. In other words, many entrepreneurs today have the luxury of being able to work around the VCs and to use them only when and if it suits their purposes. Believe me, this is huge. I have many serial entrepreneurs coming to me today who used to go strictly through large firms because, in the old days, their only option was to work with such firms and their VC allies. Today, they readily avoid such large firms precisely because they want the independence of developing their companies in a more flexible way. It is the power not to have to come to the VC table at all that gives the new-found leverage (of course, for some companies, this is not possible). This is very new and very significant in today's climate. When combined with the added knowledge available to entrepreneurs today, the power balance is definitely shifted to a degree in their favor over the old ways.
theprodigy 17y ago
I think over the past few years the entrepreneur was in more power than the VC. From a global economic stand point global savings far exceeds global investment by a lot. So you have a lot of capital in the system searching for yield.You would hear so many investors saying there is enough capital, but not enough "good" ideas. This need to find yield for all this capital created a lot of risk taking behavior. Money was cheap and easy to get over the years and that was probably the best time to get funding.

grellas 17y ago

Of course, during the bubble, the leverage shifted greatly in favor of entrepreneurs. The main advantage today for entrepreneurs (if their business model allows it) is to use bootstrap/angel-based methods of working around the VCs while building the core parts of their companies and dealing with VCs later, if at all. In other words, many entrepreneurs today have the luxury of being able to work around the VCs and to use them only when and if it suits their purposes. Believe me, this is huge. I have many serial entrepreneurs coming to me today who used to go strictly through large firms because, in the old days, their only option was to work with such firms and their VC allies. Today, they readily avoid such large firms precisely because they want the independence of developing their companies in a more flexible way. It is the power not to have to come to the VC table at all that gives the new-found leverage (of course, for some companies, this is not possible). This is very new and very significant in today's climate. When combined with the added knowledge available to entrepreneurs today, the power balance is definitely shifted to a degree in their favor over the old ways.

theprodigy 17y ago

I think over the past few years the entrepreneur was in more power than the VC. From a global economic stand point global savings far exceeds global investment by a lot. So you have a lot of capital in the system searching for yield.You would hear so many investors saying there is enough capital, but not enough "good" ideas. This need to find yield for all this capital created a lot of risk taking behavior. Money was cheap and easy to get over the years and that was probably the best time to get funding.