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The Secrets VCs Only Tell Each Other
- Venture capitalists who tweet often may not be the best choice for funding, as they may prioritize self-promotion over offering valuable advice and support.
- VC firms primarily focus on keeping their Limited Partners happy, which can sometimes lead to prioritizing management fees and fund performance over founders' needs.
- The venture capital industry is currently oversaturated with too many firms and investors, leading to a potential shakeout of below-average players.
- Despite the significant investment amounts, venture capitalists often conduct minimal due diligence before funding a startup.
- The value-add provided by VCs to founders is often limited and sporadic, with high expectations set during the initial investment.
- Founders should be cautious if VCs have large portfolios as it may limit the time and attention they can dedicate to each company.
- Venture capital can attract individuals with self-serving motives, and founders need to perform due diligence on their potential investors.
- The traditional 2% management fee and 20% profit-sharing model in VC is likely to face downward fee pressure in the future.
- Hiring ex-FAANG VC partners may not always add significant value for early-stage founders due to their non-technical roles and bureaucratic experience.
- Founders should have a clear funding roadmap in mind based on industry benchmarks and milestones to navigate fundraising effectively.
- Watching the share price, not just the valuation, is crucial for founders and investors to gauge the actual returns on their investment.
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