Comments on: “A Unified Theory of VC Suckage” http://emergentchaos.com/archives/2005/03/a-unified-theory-of-vc-suckage.html The Emergent Chaos Jazz Combo Wed, 01 Feb 2012 19:20:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Financial Cryptography http://emergentchaos.com/archives/2005/03/a-unified-theory-of-vc-suckage.html/comment-page-1#comment-578 Financial Cryptography Thu, 24 Mar 2005 17:51:59 +0000 http://emergentchaos.com/?p=583#comment-578 <strong>VCs Suck, but you can still store your data on FreeBSD</strong> Adam points to an essay by Paul Graham on A Unified Theory of VC Suckage. Sure, I guess, and if you like learning how and why, read on. Meanwhile, I'll just leave you with this amusing footnote: [2] Since most... VCs Suck, but you can still store your data on FreeBSD

Adam points to an essay by Paul Graham on A Unified Theory of VC Suckage. Sure, I guess, and if you like learning how and why, read on. Meanwhile, I’ll just leave you with this amusing footnote: [2] Since most…

]]> By: Rick Segal http://emergentchaos.com/archives/2005/03/a-unified-theory-of-vc-suckage.html/comment-page-1#comment-577 Rick Segal Thu, 24 Mar 2005 14:32:43 +0000 http://emergentchaos.com/?p=583#comment-577 Nice post, Adam, very well thought out. Here are some personal observations. First, VCs have very very hard time being different, you are correct. In the end, super smart people who lose other people's money, well, we know how that movie ends. So, you are right in the sense that we don't, as an industry, have issues that start ups do in that sense. It's about the numbers, to a very large extent. I've seen a number of start-ups where, ooops, not a VC investment, uh oh, what now. The liquidity requirement does in fact suck because everybody screwed up. Part of the really ugly term sheets have language in them that can, in the extreme, take somebody's company away from them and force a sale in order to get the investors out. Again, that stuff sucks and I sure wouldn't want to be on the receiving end of that gig; 10 for 10 on the sucks meter. Which brings me to the general point I was making about Paul and his fifty foot wide they all suck paint brush. A good/smart/professional VC should have this EXACT conversation with the person building the business. Then, wait ten days, and have it again. And again. There is no VC I've ever met that doesn't ramble on about wanting multiple exits, liquidity events, time horizons, etc. This means that even if the start up person missed all of it, you still need to have the do you understand chat before the check goes into the bank. Paul is going to go try to get some start ups off the ground. It will be interesting to see how that works out. It's a good idea and he is putting his money where his mouth is so let's root for him and cheer on the start ups. Good, post Adam. Hopefully, we all will suck less. Best regards, Rick Nice post, Adam, very well thought out. Here are some personal observations.
First, VCs have very very hard time being different, you are correct. In the end, super smart people who lose other people’s money, well, we know how that movie ends. So, you are right in the sense that we don’t, as an industry, have issues that start ups do in that sense. It’s about the numbers, to a very large extent.
I’ve seen a number of start-ups where, ooops, not a VC investment, uh oh, what now. The liquidity requirement does in fact suck because everybody screwed up.
Part of the really ugly term sheets have language in them that can, in the extreme, take somebody’s company away from them and force a sale in order to get the investors out. Again, that stuff sucks and I sure wouldn’t want to be on the receiving end of that gig; 10 for 10 on the sucks meter.
Which brings me to the general point I was making about Paul and his fifty foot wide they all suck paint brush.
A good/smart/professional VC should have this EXACT conversation with the person building the business. Then, wait ten days, and have it again. And again. There is no VC I’ve ever met that doesn’t ramble on about wanting multiple exits, liquidity events, time horizons, etc.
This means that even if the start up person missed all of it, you still need to have the do you understand chat before the check goes into the bank.
Paul is going to go try to get some start ups off the ground. It will be interesting to see how that works out. It’s a good idea and he is putting his money where his mouth is so let’s root for him and cheer on the start ups.
Good, post Adam. Hopefully, we all will suck less.
Best regards,
Rick

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