Tag: airbnb

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What It Means to be Antifragile

boxing, antifragile, resilient

The thing is this is the first real recession I’m working in. I entered the workforce something in the midst of one of the longest bull markets in modern history. So, naturally, I had a lot of questions. One of which I asked one of my mentors in VC who’s been through a few cycles late last year. “Are there any leading indicators that foretell when we’re going to get out of a recession? Or when we truly hit rock bottom in a recession?”

And he said something that made complete sense. “When the frequency of mass layoffs, especially from some of America’s largest employers, slows to a halt.”

Since then, every month or so, I check in the number of WARN notices that come in which require companies doing a mass layoff to publicly report a layoff 60 days in advance. For instance, you can find California’s here.

As Chamath Palihapitiya puts it in his 2022 annual letter, “while we believe that most of the multiple contractions in these markets have largely worked their way through the system, we suspect there is still some more room to fall — particularly if the U.S. enters a recession in the coming year.” Since it seems layoff season is yet to pass, it seems wise to buckle in for the longer run.

While friends have asked me when the recession will end, I responded with a simple “I don’t know.” No one does. And while many may make conjectures on the timing, the one thing we can use this free fall for is to build a heat shield.

I really like this one line in Chris Neumann‘s recent blogpost on antifragility. “As great as it sounds for a startup to get stronger when unexpected events occur, I don’t actually think that’s a realistic goal for most companies (it certainly isn’t the case for VC firms). Rather, I think the goal in making antifragile startups should be to minimize the risk and distraction when unexpected events occur, such that the company can continue to make progress while its competitors are panicking and reacting.” One thing’s for sure. The world is host to a plethora of distractions. Something we won’t be in shortage of. With each black swan event, we will only be left with a surplus of attention stealers.

And I’d be presumptuous to say that the best do not get distracted. Rather the best realize when they are and have ways to get back to a focused flow state. Simply put, it’s helpful to play a game of What if? What if this unexpected shock happens? How will I react when my servers get hacked? How do I react when my cash flow is constrained due to an unpredictable event? And in each broad category of What if’s, do you have a way to hedge the risk?

Sometimes, it’s preparing for the unexpected black swan event.

That’s why code is redundant to prevent the fragility of storing it only on one server.

It’s why companies like HackerOne exists.

It’s why you should have your cash in multiple bank accounts, with at least one of them being a big 4. A few top firms, including General Catalyst, Greylock, and Redpoint, have also said, “Keep two core operating accounts, each with 3-6 months of cash. Maintain a third account for ‘excess cash’ to be invested in safe, liquid options to generate slightly more income.” All to protect against the downside risk of losing all your money when you put your eggs in one basket.

But when the black swan does hit, prioritization matters even more. When the pandemic hit and Airbnb was between a rock and a hard place, Brian Chesky described it, “We realized not everything mattered. And it was like if you have to go into a house — your house is burning — and if you could only take half the things in your house, what would you take?”

Chamath went on to write in the same letter. “The most alarming consequence in startup-land has been the divide it has created between the management teams who have ‘found religion’ (i.e. made the tough decisions and managed their businesses smartly) and the rest who are trying their best to avoid reality.” And those tough decisions include, “cutting non-core projects, lowering costs, and vastly reducing G&A while getting to profitability [which] is now mandatory — otherwise you will have to face the consequences.” Those same tough decisions set teams up for success in bad times and bear markets.

In closing

Recently on the Tim Ferriss Show, David Deutsch said, “wealth is not a number. […] It is the set of all transformations that you are capable of bringing about.” Similarly, a company’s revenue is not just another number. It is a product of all the miracles that the company willed into existence. Crossing the chasm. Leaping over hurdles.

To take a line out of Nassim Taleb‘s book, “Crucially, if antifragility is the property of all those natural (and complex) systems that have survived, depriving these systems of volatility, randomness, and stressors will harm them. They will weaken, die, or blow up.” We need black swan events to create miracles. And we need miracles to create stronger, more resilient companies.

Trauma strengthens us. You need to bleed to grow scars. You need to feel pain before you grow calluses. The product of each makes one more resilient to pain and injury in the future.

One might call it antifragility.

Photo by Johann Walter Bantz on Unsplash

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The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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To Bridge or Not to Bridge

bridge

In the wonderful world of venture, an investor takes a different kind of bet with each stage as a function of industry. For instance, a pre-seed SaaS product, it’s a distribution risk. Can this founder sell this product to others? In general, the angel or pre-seed round is often a founder bet. Can this founder or founding team pull off their vision? And subsequently, if they’re able to achieve their milestones in the funding window, will those milestones excite downstream capital?

One of the greatest byproducts in starting my career in venture as a scout — sending seed and Series A deals to those respective investors — was that I learned what archetypes of deals interested them. And what didn’t. As I moved even earlier in the funnel, so, pre-seed and seed, I could help founders and their teams set themselves up for the subsequent round.

Admittedly, that became a bit harder to do in the hoorah of 2020 and 2021 — with insane multiples and raises coming together as a function of FOMO.

When looking at the present day, mid-February of 2023, one in three or four deals in my inbox is a company raising a bridge. The bet here is an execution bet. Now before I get into the questions I consider when a founder pitches a bridge fundraise, I think it’ll be helpful to consider bridge rounds as a function of good and bad markets. And why they make more sense in a bull market, for better or worse, than in a bear market.

Bridge and venture debt

In a bull market, bridge rounds — or preemptive rounds, pick your nomenclature — and pay-to-play rounds make sense. The promise of capital within six months is extremely likely. Interest rates are low enough, where equity instruments have greater return potential than debt instruments. In a similar way, the same can be said for the premise behind venture debt. Venture debt (I am but an armchair expert at best, but have been lucky to query some of the best) is debt that is issued with the expectation of another round. At the same time, the warning label here is in a few-fold:

  • Many VCs prefer not to have investors higher than them on preference stack.
  • Subsequent equity raises are used to pay back venture debt first.
  • You have a 36-month repayment period usually, after if you decide to use the capital within the first 12 months or not.
  • There are usually warrants that ask for additional ownership in the company on top of the loan.

But I digress. In a bear market, bridge markets make less sense for an investor. Bridge rounds usually occur when teams miss expectations. They’ve missed milestones. Their burn rate was higher than expected. And their runway is naught but less than a year. It’s way the most common recommendation VCs gave their portfolio companies in 2022 was have at least a 24-month runway. You have more wiggle room to prove assumptions and get to an inflection point.

In a bull market, missing expectations is almost impossible. Sky high valuation multiples and funding rounds made capital cheap. When capital’s cheap, founders are more likely to spend with less discipline than otherwise. Moreover, consumers felt richer. Their net worth appreciated in a good economy. Interest rates lag inflationary signs. And the money is out of the pocket before it has time to warm up. Consumers also not only spend more, but they invest more. Companies saw greater revenue numbers and market cap growth, leading to more liberal spending habits. Greater market budgets to acquire customers. That spending led to high burn multiples.

This all led to a virtuous flywheel, that though growth and revenue numbers hit, the cost to get there also exponentially grew. The quality of businesses declined, as consumers and companies got used to the spending habits of the good times. Those same habits, unfortunately, don’t work in a recessionary market. And when founders are unable to part with their multiple in a boom market, and for many, the spend during that same market, they go to raise a bridge round instead of offering new equity, hoping they’ll, in some way, “make it work.” And yes, that’s the exact wording some founders used.

If investors have the chance to place new shots on goal, a lot of investors today are willing to bear the opportunity cost of passing on a bridge round.

Inflection points and lack thereof

Each new round is raised on the assumption your company is at an inflection point. Right as your second derivative shifts from negative to positive. To some businesses, that’s a market inflection. A (lucky) black swan event. A technological release. Or a regulatory easing. To others, it’s a traction inflection. Users just love your product. And to another cohort, not mutually exclusive to the afore-two inflections, is an insight inflection. You’ve learned something that’s going to catapult you so much further. For Duolingo in 2012, it’s the realization of going mobile. For Zynga, in 2010, it was its partnership with a rising class of platform usage, social media, namely Facebook.

On the other hand, for Airbnb, in 2011, its major competitor abroad, Wimdu raised $90 million to focus on its European expansion. That meant if Airbnb didn’t expand outside of the US, they would lose access to a whole market of Europeans but also Americans whose vacation destinations were one of the seven continents. To the Airbnb team, in the words of Jonathan Golden, their first PM, it was the realization that “marketplaces are normally winner-take-all markets” and “when competition comes after you, move ridiculously fast.” And they did.

Bridge rounds often don’t carry that same drive or momentum. It’s not raised at an inflection point, but rather in efforts to get to one. Usually it’s not proving a new assumption but last round’s assumptions. As I mentioned at the top, it’s an execution bet. And as such, it begs the question: How much conviction do I have that a founder is going to be a great steward of capital?

Fortunately or unfortunately, unlike most other early-stage round constructions, there are multiple data points. Have they used capital to date efficiently and effectively? If so, do I believe this founder will 10x their KPIs within this funding window?

Usually the funding window I allude to is 12 to 18 months. In the scenario of a bridge, that timeline becomes six months. The expectations are less forgiving and more aggressive. What are you building to in half a year? Do you have the discipline to execute on that goal? Does your track record corroborate? Do you have a detailed plan to get there?

In closing

IVP’s Tom Loverro recently shared, “A half measure is usually something a management team lands on because it’s easy. If a decision is easy, it’s probably a half measure. If it’s hard, if it’s really damn hard… if it’s controversial, you’re probably doing enough of it. The other thing is a half measure often doesn’t have an end result or goal in mind. If you have a really specific goal, and implementing that goal is difficult, that’s probably doing your job. That’s probably what’s necessary.”

A bridge round, more often than not, is a half measure.

He goes on to say, “If it’s a good company, give them a lot of capital. If not, zero.”

This past week, I chatted with three institutional LPs, and three more venture investors about this topic. In five out of six conversations, one phrase made its appearance. “Don’t put good money after bad.” And while anecdotal, all six — every single one having participated in bridge rounds at some point in their investing career — concluded money was better spent in new investments than in bridge rounds. The caveat from these conversations was that it may work if you are either leading the round or setting the terms. Then again, that’s favorable for an investor, and may not be as much for the founders.

That said, I’m sure there’ll still be great companies raising bridges. But who knows… I await the day, not just in outliers, that we see bridge rounds trend otherwise. For that to happen, I agree with many of my colleagues that we need to see a lot more discipline from the average founder.

Photo by Terrance Raper on Unsplash

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The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

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How Much Should You Bootstrap?

I had a founder ask me yesterday, “How much money does an investor expect you to bootstrap with?”

The short answer I gave him, “It depends.”

The longer answer… well, there is no one number or specific range that investors look at. It’s a case-by-case scenario. Of course that’s not the answer he, nor you my reader, were hoping to hear. If I left you on that alone, I’d imagine this essay would be the single greatest contributor to my unsubscribe rate.

The real answer is that capital is not the unit of measurement. It can be, and may seem to be in today’s ever-increasing pace of development. Rather, it starts from a question. What is your minimum viable assumption? Something I’ve also alluded to before.

What is the minimum viable assumption? The big assumption you must prove in order to catalyze your startup’s growth. Or as Gagan Biyani, founder of Maven, puts it in the frame of minimum viable tests – “a specific test of an assumption that must be true for the business to succeed.”

Oftentimes, that assumption is synonymous to your the biggest risks of your business. Or in other cases, your biggest barriers to entry.

One of the questions we investors try to answer when we meet with a founder is: What is the biggest risk of this business? And is the person who can solve this risk in the room (or on the team slide)? It is one of a handful of risks we must underwrite to move forward with an investment.

Your ability to raise capital is directly correlated with your ability to inspire confidence in your investors that you will need little to no help getting to your next milestone. An unfortunate, but true paradox.

Circling back to the question that catalyzed this essay, how much money does an investor expect you to bootstrap with? The answer, as much as you need to prove your minimum viable assumption. Can you conquer the biggest risk of your business on your own capital? If you can, you’re halfway there. That may take $50K. Or maybe $10K. Or $100. Airbnb had to go through three different launches, and selling Obama O’s and Cap’n McCains for $40 per box, before Paul Graham noticed their traction. On the other hand, you have Mailchimp that’s 100% bootstrapped till the day they exited. Each business is different and unique in its own way.

The only addendum I would add here is that this same calculus will most likely not apply if you’re building something in deep tech – be it biotech or general AI or otherwise.

Photo by Minh Tran on Unsplash

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Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal or investment advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.

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A Strategy to Win Versus A Strategy Not to Lose w/ Alex Sok

For a number of friends and founders I’ve chatted this with, I’ve been a big fan of the concept of “winning versus not losing”. Ever since I heard back in 2018. In an interview with Tim Ferriss, Ann Miura-Ko of Floodgate said, “This is probably the hardest piece – knowing the difference between a winning strategy versus a strategy not to lose. […] Not losing often involves a lot of hedging. And when you feel that urge to hedge, you need to focus. You need to be offensive.”

There are a few great examples of what differentiates winning and not losing from both Tim and Ann in that interview. For instance, a lack of focus by going after two different market segments is a strategy not to lose. “The reason why that’s really hedging is you have two completely different ways of selling to those organizations and you’re afraid to pick one because maybe you have some revenue in both.”

My college friend recently connected me with entrepreneur, designer, angel investor, Alex Sok. Both of us found unlikely common ground in using sports analogies to relate to building a company. Me, swimming (e.g. here and here). Alex, football. Specifically, American football. Having been a quarterback for his school’s football team back in the day, he said something quite fascinating, “You can’t win in the first quarter, but you can lose in the first quarter.” And you know me, I had to double click on that.

I was previously under the assumption that you only needed a strategy to win, but not to lose. But as all generalizations that start with the word “only”, I was wrong. And Alex contextualized it for me – that sometimes you do need to think about how not to “lose”.

Winning versus not losing

“You can’t win in the first quarter, but you can lose in the first quarter.”

Throwing the ball deep for your running back to make the touchdown is a strategy to win. On the flip side, if you don’t convert on the third down, you’re going to lose. You may not win, but if you don’t, you could very much lose. Not all mistakes carry the same gravitas. Some mistakes can be detrimental; most mistakes aren’t. Just because you’re making sure that you convert on the third down does not mean you can’t still swing for the fences.

For founders, losing in the first quarter is akin to:

  • Burning through your seed funding in six months;
  • Hiring four professional executives before you get to product-market fit;
  • Not talking to your customers;
  • There is no one in the room who can tackle the biggest risk of the business (i.e. no engineer when you’re building an AI solution, or no one who can do sales when you’re an enterprise tech company)

You’re still aiming high, but that doesn’t mean you should burden yourself with an astronomical burn rate.

“Game plans will have to vary depending on your market or product. Key fundamental traits that increase the probability of failure will always be present. It’s important to identify which ones matter most in relation to the game plan,” says Alex. “A tough defense or go-to-market means being more focused on identifying which channels to pursue and then doubling down if it works out.”

On the flip side, “an aggressive defense or burgeoning industry might mean taking more chances but setting up plays wisely to take advantage of their aggressive, risk-taking nature. This will force the defense to settle down and play you more honestly. In startup terms, that might mean steady progress and growth with a few deep shots to achieve escape velocity from your competitors.”

Not to get forget about winning

You’ve probably heard of the saying, “If you want your company to truly scale, you have to do things that don’t scale.” Especially in the zero to one phase. From idea to product-market fit. Many of us in venture break down the early life cycle of a company by zero-to-one and one-to-infinity. The first “half” is doing things that don’t scale. Figuring out what frustrations your customers are going through. Getting that pedometer up on the street yourself. Daniel Kahneman wrote in his book Thinking, Fast and Slow, “Acquisition of skills requires a regular environment, an adequate opportunity to practice, and rapid and unequivocal feedback about the correctness of thoughts and actions.”

Here are a few examples:

In the early days of Airbnb, Brian, Joe, and Nathan used to visit early Airbnb hosts with a rented DSLR to photograph their houses.

For Stripe, the founders manually onboarded every merchant to deliver “instant” merchant accounts. Of course, the Collison brothers took it a step further to mint the term “Collison installation”. Usually when founders ask early leads “Will you try our beta?”, if people say yes, then they say, “Great, we’ll send you a link.” Rather, Patrick and John said, “Right then, give me your laptop” and set it up for them right then and there.

At Doordash, they found restaurant menu PDFs online, created landing pages, put their personal number out there for people to call, and personally executed deliveries within the day.

To get his first 2000 users, Ryan at Product Hunt wrote handcrafted emails to early users and reporters to grow what started off as an email list.

Similarly, in football, teams often spend the first half of the game feeling out their opponents. Their strengths, their weaknesses. And the back half, doubling down on where your opponents fall short on. While not your opponents, founders should be spending the first half feeling out their market. Be scrappy. Nothing that’ll make you lose in the first quarter, but make mistakes. Give your team and yourself a 10-20% error rate. One of your greatest superpowers as a small team is your ability to move fast. Use it to your advantage.

Paul Graham once wrote, “Tim Cook doesn’t send you a hand-written note after you buy a laptop. He can’t. But you can. That’s one advantage of being small: you can provide a level of service no big company can.”

In closing

Alex said, “In order to be a dominant offense, you have to force the defense to cover every inch of the field.” If you only throw long, then your opponents will only need to cover long. If you only throw to the left, they only have to cover left. But if you have a diversified strategy, your opponents will have to cover every inch of the field. And to win, all you need is for your opponents to hesitate for half a second. And with a laser-focused strategy, that’s all you need to break through against your incumbents. Your incumbents often have bigger teams, can attract more talent, have deeper pockets, and the list goes on.

As a small team, you’re on offense. You can’t cover every inch of the field, and neither do you need to. You just need to be a single running back who makes it past a wall of linebackers. To do that, you need focus. As Tim Ferriss recently said on the Starting Greatness podcast, “the biggest risk to your startup is your distraction.” And it’s not just you and your team, but also the investors you bring on. Sammy Abdullah of Blossom Street Ventures wrote that the question you need to be asking yourself about your investors is: “Are you going to distract me from running the business and will you be candid with me when I have a problem?”

Focus. If you’re focusing on everything, you’re focusing on nothing. You have no room to hesitate, but it’s exactly what you want your competitors to do. That half a second on the field is about two years in the venture world. Or until you can find your product-market fit. Until you reach scale. Until you reach the “one” in zero-to-one. ‘Cause once you’re there, you just need to put your head down and run. And it’s the beginning of something defensible. Of something you can win with.

If you’re curious about taking a deeper dive on product-market fit, I recommend checking out some of my other essays:

Photo by Joe Calomeni from Pexels

Thank you Alex for helping me with early drafts of this essay!

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How to Build a Culture that Ruthlessly Prioritizes w/ Yin Wu, Founder of Pulley

Last week, I was lucky enough to jump on a call with the founder of Pulley, Yin Wu. Backed some of the best investors out there including Stripe, General Catalyst, YC, Elad Gil, just to name a few, Pulley is the ultimate tool for cap table management. In addition, Yin is a 4-peat founder, one of which led to an acquisition by Microsoft, and three of which, including Pulley, went through YC.

In our conversation, we covered many things, but one particular theme stood out to me the most: how she built a culture of ruthless prioritization.

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Myths around Startups and Business Ideas

In a number of recent conversations with friends outside of venture and “aspiring entrepreneurs”, a couple myths, which I’m going to loosely define here as popular beliefs held by many people, were brought to my attention. 4 in particular.

  1. If I have a great idea and build it, it’ll sell itself.
  2. That idea/startup is over-hyped.
  3. The startup/venture capital landscape is over-saturated.
  4. If it doesn’t make sense to me, it’s not a good idea.

Quite fortuitously, a question on Quora also inspired this post and discussion.

If I have a great idea and build it, it’ll sell itself.

Unfortunately, most times, it won’t. As Reid Hoffman puts it: “A good product with great distribution will almost always beat a great product with poor distribution.” As a founder, you have to think like a salesperson (for enterprise/B2B businesses) or a marketer (for consumer/B2C businesses). People have to know about what you’re building. ’Cause frankly you could build the world’s best time machine in your basement, but if no one knows, it’s just a time machine in your basement. Probably a great story to tell for Hollywood one day (even then you still need people to find out), but not for a business.

That idea/startup is over-hyped.

I’ll be honest. This really isn’t a myth, more of a common saying.

Maybe so, at the cross-section in time in which you’re looking at it. But if you rewind a couple months or a year or 2 years ago, they were under-hyped. In fact, there’s a good chance no one cared. While everyone has a different technical definition of over- and under-hyped, by the numbers, time will tell if it’ll be a sustainable business or not. If it’s keeping north of 40% retention even 6 months after the hype, we’re in for a breadwinner.

Take Zoom, for example. Pre-COVID, if you asked any rational tech investor, “would you invest in Slack or Zoom?” Most would say Slack. Zoom existed, but many weren’t extremely bullish on it. Today, well, that may be a different story. As of this morning (Oct. 12, 2020), while I’m editing this post before the market opens, the stock price of Zoom is $492 (and same change). Approximately 343% higher than it was on March 17th, the first day of the Bay Area shelter-in-place. And, right now, the price of Slack is $31. Approximately 56% up from the beginning of quarantine.

Neither are startups anymore, but the analogy holds. Also, a lesson that predictions, even by experts, can be wrong.

The startup/venture capital landscape is over-saturated.

“There’s too much money being invested (wasted) on startups.”

From the outside, it may very well look that way. Every day, every week we see this startup gets funded for $X million or that startup gets funded for $YY million. According to the National Venture Capital Association (NVCA), $133 billion were invested into startups last year. Yet, it pales in comparison to the capital that’s traded in the public markets.

VC funds see thousands of startup pitches a year. Per partner (most funds 2–3 partners), they each invest in 3–5 per year (aka about once per quarter). Meaning >99% of startups that a single VC sees are not getting funded by them. That doesn’t mean 99% never get funded, but it’s just to illustrate that proportionally, capital isn’t being spent willy-nilly.

If we look at it from a macro-economic perspective, if we are reaching saturation in the startup market, we should be getting closer to perfect competition. And in a perfectly competitive market, profit margins are zero. The thing is profits aren’t nearing zero in the startup/venture capital market. In fact, though the median fund isn’t returning much on invested capital. A good fund is returning 3–5x. A great one >5x. And well, if you were in Chris Sacca’s first fund, which included Uber, Twitter, and more, 250x MOIC. That’s $250 returned on every $1 invested.

If it doesn’t make sense to me, it’s not a good idea.

Finding Product-Market Fit and “Idea-Market Fit”

Revolutionary ideas aren’t meant to conform. If an idea is truly ground-breaking, people have yet to be conditioned to think that a startup idea is great or not. As Andy Rachleff, co-founder of Wealthfront and Benchmark Capital, puts it: “you want to be right on the non-consensus.” Think Uber and Airbnb in 2008. If you asked me to jump in a stranger’s car to go somewhere then, I would have thought you were crazy. Same with living in a stranger’s home. I write more about being right on the non-consensus here and in this blog post.

Frankly, you may not be the target market. You’re not the customer that startup is serving. The constant reminder we, on the venture capital side of the table, have is to stop thinking that we are the core user for a product. Most products are not made for us. Equally, when a founder comes to us pre-traction and asks us “Is this a good idea?”, most of the time I don’t know. The numbers (will) prove if it’s a good idea or not. Unless I am their target audience, I don’t have a lot to weigh in on. I can only check, from least important to most important:

  1. How big is the market + growth rate
  2. Does the founder(s) have a unique insight into the industry that all the other players are overlooking or underestimating or don’t know at all? And will this insight keep incumbents at bay at least until this startup reaches product-market fit?
  3. How obsessed about the problem space is the founder/team, which is a proxy for grit and resilience in the longer run? And obsession is an early sign of (1) their current level of domain expertise/navigating the “idea maze”, and (2) and their potential to gain more expertise. If we take the equation for a line, y = mx + b. As early-stage investors, we invest in “m’s” not “b’s”.

In closing

While I know not everyone echoes these thoughts, hopefully, this post can provide more context to some of the entrepreneurial motions we’re seeing today. Of course, take it all with a grain of salt. I’m an optimist by nature and by function of my job. Just as a VC I respect told me when I first started 4 years back,

“If you’re going to pursue a career in venture, by nature of the job, you have to be an optimist.”

Happened to also be one of the VCs who shared his thoughts for my little research project on inspiration and frustration last week.

Photo by K. Mitch Hodge on Unsplash

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VCs = Gatekeepers?

vc gatekeepers, gate

Not too long ago, I had the fortune of chatting with a fascinating product mind. During our delightful conversation, she asked me:

Are VCs the gatekeepers of ideas?

…referencing Michael Seibel‘s recent string of tweets:

And I’m in complete accordance. I want to specifically underscore 2 of Michael’s sentences.

… and…

The only ‘exception’ to this ‘rule’ would be if investors themselves were the target market for the product. At the same time, I can see how the venture industry has led her and many others to believe otherwise. So I thought I’d elaborate more through this post.

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