More of these (via https://news.ycombinator.com/item?id=48418641 below):
https://xcancel.com/gregisenberg/status/2061794787825479818 (<-- the OP)
https://xcancel.com/dunkhippo33/status/2062768969560510486
https://xcancel.com/typesfast/status/2062791307094048937
https://xcancel.com/awxjack/status/2062605286683336757
I'll share a story, but its about a close friend and not me so I won't name any explicit actors and I'm going to round out the numbers. You either trust me or you don't, but this is a very direct relationship I have to both the founder and VC.
The story is this: the founder started their company outside of SV, so the lawyers weren't super familiar with startups and messed up the initial incorporation and stock plan stuff (actually super common: use Stripe Atlas or pay a startup-aware lawyer!). Went under the radar through years. This company ended up being bought for nearly $1B (with a B) after many rounds and a large board.
During the legal work to close the acquisition, they found out this messed up stock plan. Without going into the details, the effect was that instead of taking home $200M, the founder would take home ~$75M. The mistake the lawyer made almost a decade earlier was about to cost him $125M.
Most of the board basically said "too bad so sad, law is law." But one VC (the one I know, the one I'm talking about) basically strong armed and politicked the whole thing and eventually convinced everyone around the table to give up an equal share of their own holdings to make the founder whole.
Letter to the law: they didn't have to.
Spirit of being founder friendly: this VC went to bat hard and got everyone to yield to make things "right."
Also, look, you might argue $75M vs $200M is just "rich vs rich." Who cares? Sure. That's not the point.
You don't hear about stuff like this because honestly its not a big enough deal and feel good stories get way less clicks than pitchfork stories.
I feel as if basic Personal Integrity is now considered an anachronistic weakness, in the tech industry, and it's heartbreaking. I know that VCs can probably share similar stories [to the OP] about some of the people that pitched them, or their behavior, after getting funded.
Lotta ass, being shown, all around.
At some point in the future, I may consider smaller-scale (local) angel investing, but it seems like such an ugly field, not sure if I'll ever do it. I don't need the money; I would do it to help folks get a leg up.
(I mention this so more people can know the list exists, and hopefully email hn@ycombinator.com when they see comments we should add.)
Life's too short to screw people over - reputation is one of the few things that last after we're gone.
It's unfortunate that some VCs I respected turned out to repeatedly have their reputation tarnished by such negative stories. I'm not sure what compels founders and VCs to be polarizing and not diplomatic like the old days.
About 10 minutes into the pitch, she cut us off, and basically said -- as absolutely kindly as something like this can be directly said -- "I am not going to invest in this, and furthermore I don't think what you're trying to do is investible at all". Then she took a bunch of her time to run us through why, help us understand some very fundamental things about the VC world we didn't quite have right, and generally be brutal but extremely useful in us framing what we were trying to do.
She didn't have to do that. She could have nodded along and then given us a polite "no" like everyone else. She could have cut us off and given us a rude "no". But she didn't -- she made sure to use the time we had to help us as much as she could, even if she very adamantly was not going to invest.
Not a big gesture or anything, but kind and helpful. There's a lot of that. But it doesn't make headlines.
The VC landscape has changed a lot since some of these stories happened. Many years ago, there were few VCs and even good companies had a hard time getting funding. This created weird environments with some VCs raised funds and then liked having companies crawl to them to beg for the money.
There are still some VCs like that, but there has been an explosion of VC funds and money. Most VCs know they need to work hard to earn the trust of founders that they want to invest in. Leaving a bad impression could mean you're left out of the next round if you want it.
This goes against the popular idea of VCs, but most VCs I've worked with are actually pretty boring, normal, nice people.
I've been meaning to write up my story with him. Now is a great time with all the horror stories on others that have been coming out.
He sticks through his companies for over a decade, which is rare in this business: https://x.com/ericvishria/status/2051459386372149506
https://voidzero.dev/posts/voidzero-cloudflare#acknowledgeme...
I mean can you actually imagine the internal monologue of a guy like Sam Altman?
For example, if you go off with the cheating partner, don't expect it to not happen again
None of those "worst experiences" seem all that unusual to me (though nobody will say #1 out loud anymore until after they've invested), and #3 is completely in character for Vinod.
After all its just business decisions like Cloudflare recent layoffs no?
With what authority are VCs claiming to be capable of being an accurate judge of talent or character in less than an hour?
Sounds like said VC in your example is doing insufficient due diligence and just investing based on vibes.
Judging by the stories being shared here, that is all it takes to get funded...
Of course to people like the author, it seems borderline sociopathic to casually suggest such levels of betrayal. It is like trying to get into the most exclusive nightclubs, and when you're finally in the front, the bouncer will look at the group and say "You can get in, but not those two". It sucks, but to the bouncer it is just business as usual, and you're just another face.
I get the business as usual analogy but the specifics of the interaction are different. You just showing up to your club with your friends is different than having equity in a company you cofounded.
In my experience, a more interesting friction is that VCs are pursuing a diversification strategy while founders are pursing a singleton strategy.
I'd love to see/hear the words that people actually say when I hear stories like "they said they wouldn't [invest/buy/etc] from me because i'm a woman".
"1. A Sequoia partner passed on Cloudflare because he didn’t think a woman could lead a security infrastructure company. Seriously. "
"Young Global Leader '14. Co-founder, President + COO Cloudflare"
It's a bit crazy in hindsight that companies would have avoided investing, considering this is a space someone like Akamai occupied, and clearly there is value in this space. It's incredible to see how Cloudflare has grown over the years, kind of happy they grew as much as they did, a bit surprised by some of those VC nightmare scenarios.
My point is that it’s very very hard to know in advance that a startup is going to be awesome at marketing. Their tech was not, on its own, a giant moat or a “must have” standout. So I can see why some VCs shrugged.
Is it the money that makes them stupid or smth?
The other thing is it is maybe the most nepotistic industry out there. Which somewhat makes sense given the actual job is so relationship based.
https://x.com/gregisenberg/status/2061794787825479818
Some QTs:
https://x.com/dunkhippo33/status/2062768969560510486
https://x.com/typesfast/status/2062791307094048937
https://x.com/awxjack/status/2062605286683336757
source: most of the bullshit i surface up nowadays
I don’t know if Angel investing groups are really still around like they were in there 2010s but the variance in the types of insanity and weirdness for those groups is really unmatched.
I was invited and drove 3 hours. They then put you in a giant dining room with all the country club members eating dinner, with your own table by yourself. They tell you to order whatever you want, and wait there, and when the group is ready you'll be summoned to dance.
Anyway, whenever they are ready which was like an hour and a half, they call you in and you have to be ready.
While they loudly eat dessert you are supposed to walk around this 20' long table pitching them whatever you're doing and then you have to take questions from them, while still walking around a table. No presentation place, no place to sit, no real way to talk with everyone, you're always talking over someone's head.
Then they say thank you and on the way out you get a bill for whatever you ate.
That was one of the "nice" ones.
I think every Chinese backed firm on sand hill road at the time was a front for Chinese billionaires money laundering, I'm sure I have the giant spreadsheet of funds I talked to from 2016 that later turned out to be almost exactly that like Rothenberg Ventures.
The bad ones are LP's sexually assaulting people and being told to ignore it or that it's no big deal (I didn't ignore it and people got fired). Or when LPs push CEOs to fire more people than they need to, or to raise money through some shady vehicle to get it off the books. Not to mention seeing too many people that later were in the Panama/Epstein files.
Literally horrific
Oh man, I'm really sorry you had to go through that :'(.
One might say why bootstrappers won't get erased too but they can carve out a specific market too small for AI companies to want to touch, and still remain sustainable rather than needing to make a ton of money; and pivoting as a venture backed company can be much harder as there are more people to please like investors and your employees which you likely have more of than a bootstrapper.
That does not match the definition of success here...the trick is to become a billionaire and call yourself an entrepreneur without ever turning a profit.... :-)
Then keep getting acquired, become a VC, do the same on and on.
Clouflare is an example as a loss making company, every single Musk company with the exception of his state subsided Tesla, Epic Games, Snap, DoorDash, WeWork, Rivian, Lucid, Peloton, Roblox, Wayfair, Lyft, Reddit, ...
Being a real business, and turning a profit, is very, very hard, you have Google, Amazon and a infinitesimal few...
> You’re not talking to someone who woke up a loser. That loser attitude, that loser premise makes no sense to me.
These fuckers are grotesque caricatures in human skin.