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| “Arguably they're tolerable in the VC world, or at least pretty common.” (comment) | ||
| recommended by 1 user | 2009 | pg on: Advice to Summer YC Applicants | fundraising & equity | original thread | | ||
| pg on Mar 23, 2009 | on: Advice to Summer YC Applicants | view on HN | ||
| One user recommended this comment. What they said: |
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lanceweatherby Sep 3, 2009 | on: 37% of Shotput Ventures startups stayed in Atlanta | context
It will be interesting to see if the ones that stay in Atlanta can get funded as well as the ones that are getting SV intros (a Shotput Ventures partner lives in SF and 2 Shotput companies moved West). It's early, we will need to do an update in 90 days. You were dead on in your comment that Y Combinator style seed funding is not regional: http://news.ycombinator.com/item?id=528924 Half the Shotput companies came from outside the South. |
Arguably they're tolerable in the VC world, or at least pretty common. Empirically an expiration date on a termsheet is not always evidence that a VC is desperate or dishonest.
It's when this idea gets imported into seed funding that it really becomes a problem, because of the synchronous nature of this market. And it gets worse as the number of seed firms increases.
The root of the problem is that people think seed funding is regional. They think they're starting the YC of St. Louis, or wherever. Then after they get started they realize that in fact the seed firms are all drawing on the same national applicant pool, and that the default fate of the nth seed firm is not to be the YC of St. Louis, as they'd expected, but to be the YC of the nth quality bucket. That's a pretty grim situation, and it tempts them to take desperate measures. The VC market is more fluid, so VCs aren't subject to such pressures.