Disclaimer: This is only marked as NSFW in case you’re reading and members of the communities are within eyesight.
Hey everyone! 👋 So, I’ve been diving deep into the recent VC and founder drama that’s been making waves on X, and it’s got me thinking. The article from TechCrunch highlights some heated exchanges between famous Silicon Valley names like David Sacks and Paul Graham regarding VC behavior, and honestly, it raises a lot of questions! You can check it out here.
As someone trying to navigate the tricky waters of fundraising for my robotics startup, I’ve definitely felt the pressure. The path isn’t easy, and bootstrapping is a tough gig. It’s clear to me that either we need plenty of capital upfront, or a solid backing from VCs to even hit that MVP milestone. My mentors have offered great advice on seeking angel investors, but the general vibe is that there’s hesitance out there, and funding seems harder to come by.
Here are some thoughts swirling in my mind:
- Toxic Relationships? 🤔 Is there really rampant toxicity between VCs and founders? It seems like the accusations are flying around, and I can’t help but wonder if the ecosystem is as strained as it appears.
- Investment Trends 📊: Are we witnessing a shift in investment appetites? Maybe founders are feeling the brunt of market changes and economic uncertainties.
- Old Practices Resurfacing? ⏳: Has this kind of dysfunction always existed in Silicon Valley, or is it just now being exposed for all to see?
As someone navigating this space, I value transparency and open communication in these discussions. It can be tough feeling like you’re battling against the odds just to bring your innovative ideas to life. 💡 The emotional rollercoaster of fundraising is real, and I know I’m not alone in this struggle!
So, I’d love to hear your thoughts! Are you concerned about the VC/founder spat? How are you managing your fundraising journey? Let’s exchange experiences and maybe share some tips. If you’ve been through the process, what helped you? 🤝
Looking forward to your insights!
🔗 Relevant resources to check out:
And of course, here are a few hashtags to keep the convo going:
#StartupLife #VentureCapital #Founders #Fundraising #TechnicalInnovation
There is a shift in appetite [see here](https://news.crunchbase.com/venture/startup-funding-q1-2024-charts/?utm_source=www.saassun.day&utm_medium=referral&utm_campaign=the-truth-about-boostrapped-startups-might-surprise-you). The economic environment is just different.
Still, you’re overthinking this. You can raise capital, and you could bootstrap. Sure, bootstrapping won’t be easy at all, but you have to get creative. [Airbnb famously sold re-packaged boxes of cereal](https://finance.yahoo.com/news/airbnb-sold-30-000-obama-204034867.html) to bootstrap, among other things. It’s not easy, but you have to do what you have to do.
At the end of the day, the founders that make it (whether VC funded or not), are the ones that figure out how to make it work.
Go get it done 💪.
What’s the tldr of the story? That article doesn’t get into the gossip.
Yes, be careful who you take money from. People be greedy.
I could not care less what these big VC types think or post on twitter. In general but *especially* about politics.
VCs are tightening their belts more now because of the shifting economic environment than previously. But VC & Founders have never been best friends. There’s always been a friction point because of the fact that investors want maximum revenue + ROI, while founders oftentimes also want a good product, and other things as well. Over the last 10 years I’ve seen plenty of founders get grilled by investors for “overinvesting” in development of product, or other areas when they ‘should of been focused on outbound and nurturing sales’
The only other shift I see is people more willing to speak about it openly. It used to be taboo to talk about what happened in board meetings from a culture or encounter perspective- now it’s becoming very norm. Which isn’t a bad thing. Assholes should be held accountable for being assholes.
Why would I be concerned? Two VC groups don’t like each other and are on opposite sides of the political spectrum.
It doesn’t matter. There are good VCs and bad VCs just like there are good cofounder s and bad ones. Startups are like living organisms and are a little fragile. They must react and adjust to the environment. They can die for all sorts of reasons.
You have to weigh your need for funding with the qualities of the people that will come with it (like the VCs). If they are bad and you don’t trust them- either don’t take their money or go in eyes open because you have to get the funding. You can reference check VCs – they shouldn’t be surprised if you ask. Ask founders they have worked with how they acted when things got tough.
This is not as complicated as everyone makes it but every situation has a or of unique elements and people make decisions in different ways with different prioritization.
Both VC and bootstrapping are solid approaches for starting a company. For hardware companies, bootstrapping is harder. For software it’s easier.
My opinion is that many people have raised too much money and too early. Most startups fail because the market doesn’t really want the product as much as the founders think it does. That’s actually cheaper to find out than most founders think, and usually doesn’t require much money (maybe 10K dollars) but does require a lot of time.
When you wait until after you’ve proven the market (lined up buyers) raising money becomes much easier. When raising money becomes easier, you can choose investors who are founder friendly. Don’t treat it as a bidding war, treat it as finding a business partner: ethics and trust and shared goals are more important than the financial terms
ESH – in fairness, what was going on at Zenefits ranged from simply gross to illegal. Neither of these guys took responsibility for it, despite owning it and deriving huge wealth from it.
This season on *Real Asswipes of Silicon Valley*
>Is this how things always been?
Basically, most VCs are bad people who happen to have money or are working for someone who was worse and has more money. They want one thing, ROI. All the other shit is just lipstick on the pig. A kind VC is a unicorn. That has always been the case and it has always caused friction.
Don’t let two wildly wealthy Silicon Valley drama fucks affect you in any way because it doesn’t.
At least on todays all in pod, Sacks will spend the entirety actually talking about startups.
Who, what? Uh, never mind….
The cowards never started and the weak died along the way. That leaves us, ladies and gentlemen. Us. (Phil Knight, Shoe Dog)
There are assholes in every domain. VCs have their share, but don’t have an over-representation of them. In my experience, there are more founders with a bizarre sense of entitlement to other people’s money than there are VCs who are clear assholes.
When you take money from a VC, there’s a formal contract involved. It says what it says. Underneath that contract is a clear principle – they aren’t in this for the lulz, they are in it for the money. If you aren’t prepared for that…don’t take money. 🤷♂️
I saw the TechCrunch article…that founder is in the wrong…SEC violations are not a good look, lol…
The what?
USG contracting is a huge PITA, but given your capital needs it might be worth checking out a SBIR.
I think the only concrete takeaways are (1) don’t give any credence to anything David Sacks says, and (2) *definitely* don’t take a check from him or anyone affiliated with him. These aren’t novel insights, but if you didn’t know them already, now you do.