Andreessen Horowitz Joins The Start Fund To Seed YC Companies(techcrunch.com) |
Andreessen Horowitz Joins The Start Fund To Seed YC Companies(techcrunch.com) |
PG == the new patron saint of start-ups.
All their deals seem like big money and late stage. Do they know a good startup when they see it? Seems like instead of finding startup investment opportunities by themselves they're going to let YC filter out the good deals for them.
They even said in the article it's just about deal flow.
As a general rule, no VC firm will respond to a cold email. You need an intro from someone they know. Your best bet is to try to get an intro from someone at a company they've invested in.
From the investor's perspective this a) filters out people with no conviction, b) filters out spray and pray-style emails, c) helps them manage hundreds of emails they receive every day.
Creating and running YC is not in the least bit easy.
I just meant that SVA and AH could, if anybody anywhere could, and if they so desired, have concentrated their resources to try to set up a new program that emulates YC. Compared to anyone else's chances, in the universe, to emulate YC, SVA or AH would have had the financial, intellectual, and social resources to have had a relatively easier go at it.
But neither of them tried to emulate, they both chose instead to coalesce around and go to war with the YC they had.
I think that choice is non-trivial, and significant; and it lends ever more acceleration to YC putting ever greater depth between itself and any potential competing program.
Incidentally, Ron Conway is proof the model works. He has been operating this way for decades and founders are as a rule pretty happy with the amount of help he gives them.
Also I am wondering if this approach will have to be the new approach or the one that Khosla, Benchmark, Sequoia (I understand they are indirectly in YC companies) and similar ones have had for long, of identifying big trends, finding the right company and going big behind it, is still better. I have seen the latter fail as well as succeed. I think we have very little data on the former but there is bound to be a limited set of companies that a VC partnership can optimally support / manage and this new approach may put a strain on it. I guess we have to wait and see. Thanks much for replying, pg.
I wonder if $50,000 even gets you an in-person meeting.
What incentive do Ron and Yuri have to give up 1/3rd of the Start Fund deals to Andreessen Horowitz?
Forgive me if this is a naive question.
2. YC classes have grown in size a lot. It's probably a bit more expensive than they planned, so they don't mind sharing the load.
3. Having AH as a partner helps the startups, which means they're more likely to succeed (hopefully).
2. This is highly plausible and sounding to me like the most likely reason
3. Absolutely, I'm just trying to understand why its as 1/3rd of Start Fund instead of offering their own deal
Help me understand the thinking here...
I am a little surprised that Ron and Yuri let them in on such a good deal. I am sure a lot of VCs would jump at this opportunity.
If they're lowering amount/group in favor of number of groups, it probably means it makes more financial feasibility to do so.
Edit: Also realize that the initial investment also acts as a doorway for them to enter future larger deals, if they so wish. Shifting from a 75k investment to a 50k investment means they increase their opportunity without really sacrificing good will on the founders' part.
Isn't this the exact business that VCs are in? Identifying amazing offers?
You make the claim as if VCs are not in the business of looking for amazing deals, vs everyone else who is in infinite other businesses...
Yeah, there is the rule that intros are best - but still, why try to architect vision and innovation out of the VC market?
He was talking about how they (VCs) are not in the business of vetting ideas - but pursuing sure things. Yet all the rhetoric around the VC industry says otherwise.
(Also, the instructions on the form say it is for "other inquiries." You're supposed to send business plans to one of the email addresses on the right. So if you used the form that may be why you didn't hear back.)
VC public e-mail addresses == /dev/null .. they exist purely to appease the raging masses of entrepreneurs hanging outside their walls, reading Venturebeat ( fill in another 10 top " blogs " of your choice ) more than mails from their mum.
Cold calling any of them will not work. Heck even intros from the highest level are not treated that nicely if you're a first time guy.
Best place to be in, acquire unfair advantages like a yC tag and learn everything you can from insiders. Make a product that even in its most seed form shows a pathway to an entire industry. Get traction.
"If you're in a fair fight, you didn't plan it properly." - Nick Lappos, Chief R&D Pilot, Sikorsky Aircraft
They also made the point that they know lots of people and anyone should be able to network their way into a personal introduction, a trivially easy task compared with many other tasks needed for forming a startup, so they actively use that as a filter.
"Hi, I have an 'amazing' opportunity for you to invest 'early' in a new startup. I am willing to meet at time XXX or you can call me at XXX."
It is very likely that you will get ignored. In fact, I did send an email with a rough business plan about my previous startup to the above email before. And, someone from a16z replied me telling me that they were not interested in the market that I was in then.
Why don't you try to send an email with a real/concrete proposal about your startup/idea? It is more likely that you will get a reply from them in this way.
On the other side of the marketplace, there are literally zillions of entrepreneurs who want their money.
All that said, it'd be nice if they had an auto-responder on the site saying, "We try to look over all of these, but can't offer a reply unless something REALLY catches our eye," to set expectations accordingly.
With introductions, the referrer stakes his or her reputation on the referee. Make too many bad recommendations, and that cuts out a bad lead. The most successful organizations I know recruit through internal contacts - and it just makes sense from a VC's perspective to do the same.
It's about the best allocation of time vs good finds, rather than just finding every good opportunity.
Doesn't this sound like an opportunity then?
Why have a blackhole at all? Why be so un-innovative? Sure, it will cost you money - but if you claim that this is the reason for NOT doing it - you admit that innovation is not your goal, but profit only, thus it will go against so many supposed charters of VCs out there...
Let's be honest here. What is the bottom line?
Either VCs only want a "sure thing" or they actually want to foster innovation and progress, and receive profit as a result.
If you are in the former, not the latter, then - sorry - but I have no respect for you. Regardless of your success.
Paradigm shift, we need it.
Perhaps, you are correct, I do not have the expertise to have a POV.
Just a minor correction, I do not have an MBA and or the admin with the description you gave. That's rather demeaning to the women who may be reading this list.
Just another coder in a team of four trying to figure things out. You've correctly identified err.. my virtues[1].. guilty as charged.
Take it easy mate.
[1] - http://en.wikipedia.org/wiki/Larry_Wall#Virtues_of_a_program...
I just want the startup world to get the return on value that they produce.
I am still jaded in this area...
Thanks for the reply.
Think incubators like yC and others are already onto this.
>>Paradigm shift, we need it.
Perhaps, maybe there is someone like that with the time at hand.
A singular paradigm shift as defined by Kuhn et.al., strictly speaking, would perhaps take half or quarter of a lifetime of effort.
Most entrepreneurs would want to invest that energy into building their companies, not involved with too much political muck.
VCs / institutional folks are functionally services. Its like a 7 star hotel, there are some people who can afford to stay there. Some can even afford a presidential suite. They don't give a hoot about those that cannot pay the tab.. mostly because they are fielding all the demand they can get .. and have no time for anyone's feelings.
You have a better chance of getting empathy from groups like yC than VC.
" Idolatry is the name of the error which attributes a sacred character to the collectivity; and it is the commonest of crimes, at all times, at all places. "[1]
" In particular, the modern factory reaches perhaps almost the limits of horror. Everybody in it is constantly harassed and kept on the edge by the interference of extraneous wills while the soul is left in cold and desolate misery. What a man needs is silence and warmth; what he is given is an icy pandemonium "[1]
[1] - http://www.amazon.com/Simone-Weil-Anthology/dp/0802137296
Did this not get directly refuted by PG in his earlier comment in this thread?
I am sorry - but your post rings so full of hubris and egotism that I cant take you seriously.
If I am just obtuse, then I apologize. Please consider the following;
>Most entrepreneurs would want to invest that energy into building their companies, not involved with too much political muck.
Where are you showing VCs/even YC to reduce political muck? It appears to be rampant. I see that the initial investment (YC seed, through others) has increased - but that does not prove the value to dollar ratio has necessarily increased at the same rate.
Political muck indeed.
>VCs / institutional folks are functionally services. Its like a 7 star hotel, there are some people who can afford to stay there. Some can even afford a presidential suite. They don't give a hoot about those that cannot pay the tab.. mostly because they are fielding all the demand they can get .. and have no time for anyone's feelings.
This is fucking BS; you state that Receiving VC is equic with CHOOSING to stay at a 7 star joint.
Look - people do NOT choose to stay at a 7 star place (no such thing) unless they already have the funds - in your case, you are saying that one only counts if they have already been included in the circle to, not only, receive the 7-star funds, but are also in a position to spend said funds on same resort.
Please correct me if I am wrong.
You sound like an MBA/Finance, uh, geek who entered into VC at too young of an age and the only person you have managed directly is the hot admin with big tits whom, had they not ordered your coffee correctly, you would have berated them for their poor upbringing.
Sorry - but, I do not think you are really of the proper domain expertise to be answering such threads.