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Hey tech billionaires, if you want to talk about radical change, let’s abolish venture capitalism
(www.theguardian.com)
this post was submitted on 01 Nov 2023
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Kind of right but of course it's not just a filter to make sure the right kind of people get funded.
But it is a bet that only matters if it pays 100 or 1000x. If it's not paying that it's as good as 0. That's why, most of the times, vc money does not benefit the company, unless it manages to have that insane level of growth. It's also frequently not in the best interest of the founder.
This right here has been my experience with VC. I was working for an online retail startup when 9/11 happened. Within days, we were all called into the office to be told we were shutting down because the VCs pulled our funding. This despite the fact that we were only two months away from projected profitability and beating our sales projections every single month. But we weren't the biggest paying bet in the casino, so they dumped us when the cash flow got tight.
That would have been a successful company, but it wasn't good enough for the VC class.