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Thoughts on VCs and entrepreneurs

Fixing Venture Capital By Joel Spolsky inspired me some thoughts on VCs and founders.

This is only a game. Everyone is going ahead towards their goals.

VCs manage money and all they want is to invest it and get the possible highest return on the possible shortest term. They do this in order to reinvest it and stay in the game.

What do founders want? The same. Invest and get returns. The difference is just they invest more knowledge and work, not money. (We could say founders have other goals then getting returns, but lets keep things simple for now.)

I am sure everyone who plays the game plays with the best useage of their knowledge and power. So I consider the way of what VCs are doing that they are doing it very well. I got to this conclusion because we can say right now they have more power then founders have.

We can go phylosophical and think about why is it like this and how it is going or not going to change in the future.


Tamas K.
Sunday, June 22, 2003

>We can go phylosophical and think about why is it like this and how it is going or not going to change in the future.

IMO, this is because of the old saying: "He Who Has The Gold Makes The Rules"

To a founder, the VCs are like clients (in a way they are clients) - without them, they don't exist.  So they have to keep them happy.

Sunday, June 22, 2003

unless a founder can work without the VC's.

Also is the founder willing to trade smaller short term returns, for larger long term returns?

Finally, if VC's are like clients, in the sense you have to keep them happy, wouldn't at least some founders trade the VC money for a)more control and b)more time to focus on the real customers

Daniel Shchyokin
Sunday, June 22, 2003

A game??

Sunday, June 22, 2003

Seems to me that many technology based startup businesses are relying too heavily on venture capitalists for their initial funding. Overall, this type of money source only amounts to 2-3% of the way most companies get their funding.

That said, the sad reality is that over 90% of all businesses that seek external funding fail to find it.

One of my biggest beefs with our government leaders (Bush and Congress) is not that they are pro business but that they are pro BIG business. Instead of more tax cuts for large corporations and the rich how about pouring more money into somthing like the Small Business Adminstration (SBA) and how about making it easier and faster for small businesses to secure low interest loans?

One Programmer's Opinion
Sunday, June 22, 2003

Maybe if small businesses could afford to give millions of dollars to politicians.
Monday, June 23, 2003


Can't be either parties are happy. If there are more people are involved in a business someone looses. Can't be everybody happy. If there are more players in the game can not everyone win.


A game... I heard that in The Matrix Reloaded.

Merovingian: ...You see, there is only one constant, one universal, it is the only real truth: causality. Action. Reaction. Cause and effect.
Morpheus: Everything begins with choice.
Merovingian: No. Wrong. Choice is an illusion, created between those with power, and those without. ...

Merovingian: ... It's a game, it is only a game.

Tamas K.
Monday, June 23, 2003

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