Comment by ldjkfkdsjnv
2 years ago
Rubrik for early stage:
1. No product:
-> went to stanford or harvard -> funded (no questions asked)
-> held director level at faang -> funded
-> everyone else -> probably not funded
2. Have product:
-> not prestigious -> need real ARR with good growth
-> prestigious -> need a product
-> everyone else -> not funded
This is almost accurate. I would add one more thing:
Yeah i was more so thinking of first time founders. Second time founder is a different thing, though I dont think early employees ("founding engineers") get much respect.
They do - they just have to have had larger successes.
"Founding X" doesn't count for shit.
Being part of a team that built a hugely successful product teaches you a lot - it teaches you about the counterintuitive dynamics of superlinear growth. That is a very important mindset to bring to the table if you want to create a successful VC-funded startup.
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“Founding ____” is not “founder”. It’s just a fancy way of saying “employee”. This is always been the case.
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No, definitely not as employee. Maybe founder. Failing as (a funded) founder is ok too.
It's the chain of trust. It means that the investor is already 2-3 handshakes away from the founder, and hence can discuss certain things that require utmost discretion, and have reasonable grounds to believe they won't get double-crossed on that (because it would erode away the trust along the handshake path).
two precious things in this economy:
- attention
- trust
a lot of this is reputation laundering
the outside capital is real, quickly landing a lead investor that gets the other investors to close comes from controlling the pools of capital
your family’s donor advised fund and private foundation are the lead investors, or they are the only limited partners in the private equity fund thats functionally a family office
this same capability allows for top university background too, or nonchalantly dropping out of it
in the mean time you get all the headlines in the world, alongside your PR agent, and you’re a genius star Stanford drop out that gets funded no questions asked
The “friends and family round” is actually more important than the stanford aspect, if we were really min-maxing here, but it all goes hand in hand as people with that support system do things together
the reason it is important to view it this way is because this is all window dressing for a bourgeoisie that doesnt want to be seen as different. in turn, it makes everyone else think they really have a chance of receiving the same consideration from their ambition and cognitive abilities. the answer is to just have capital and a predilection for de-risking with other people’s money.
I've never seen a donor advised fund or private foundation on a startup cap table, and I've seen quite a few. Got any examples?
have you checked the incorporation status of every entity on the cap tables?
this would be difficult to know from a passing glance, they wont necessarily say any combination of “Charitable Non-Profit Foundation”, although I have seen that on cap tables and other disclosures
they can be any entity type and trusts. Trusts dont need to have “Trust” in the name
donor advised funds are not separately incorporated, and may also be on the cap table as the sponsoring charity
and again, as a limited partner in a fund, neither would show up on the cap table, just the fund they invested through
This is super weird to me. In the tech circles I've run in, being from Harvard is about the same as being from UCLA or something.
I've never heard it considered a sign of exclusivity. CMU, Stanford, MIT, yes. But Harvard? It's not exactly known for a rigorous engineering program, and even less so the last fifteen years or so.
When looking for CEOs, they don't look for top notch engineering talent, they look for top notch CEO talent, where talent means capability. CEOs do need deep technical understanding, anything else and you have an enviroment that scares away engineers, but they don't need to be the best engineer in the entire company.
If you've been to Harvard, you are on a first name basis with highly ranking finance people. It's not a coincidence that among all the dot com carnage, Amazon emerged as the ecommerce champion: they lived thanks to Jeff Bezos being able to get continued funding despite making continued losses. For that, you need, among other things, good contacts into the finance industry and know how they work and think.
A membership in the exclusive club of Harvard graduates gives you the ability to find customers, advice, funding, employees. Stuff that makes it more likely that your company is more successful.
This sounds totally backwards, but I say this as someone who has no personal experience raising money, so maybe you're a VC or a founder?
If someone can get in front of VCs, presumably it doesn't matter if they know a bunch of other rich people from school. I really don't get the sense that VCs are impressed by someone's ability to convince some nepo hedge fund manager to invest a few million.
I think they're impressed by business accumen combined with technical chops. If you want to bootstrap, then yeah, maybe a school with the most amount of money matters so you can get a huge seed round.
But you think people with strong ideas and impressive technical backgrounds who get in front of VCs are going to be less impressive by less technical people who rub shoulders with finance bros?
Certainly Harvard/Yale is a good choice if you're going into medicine, law, or I dunno, maybe banking? But tech? I wouldn't think it's a top choice at all.
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It's the whole fairground saying, right?
(I'm definitely in the middle-class bucket)
Like the 'No child left behind' did wonders to education, maybe 'No startup left behind' is needed to fund all of them irrespective of business model or founders' background.
I'd edit this to
Source: I know lots of female and non-white Harvard grads who didn't get funded. I'm a non-white MIT grad and also found funding very, very difficult even when we had a product. We almost continuously had to spend >1/2 of our working hours just trying to get funding. Hundreds and hundreds of coffee chats plus travel time. We were building hardware, so bootstrapping wasn't an option.
White male Harvard grads I know routinely got funded very quickly, though. They often had time to get actual work done. Even still, most of them didn't succeed in the end.
Hardware is a different category and doesnt really fit the traditional VC model. Also, indians/east asians are the majority in tech, not the minority. Plenty of examples of open discrimination in big tech from those groups
I'm not white either but seriously, this mindset of "victimization of non-white people" needs to stop. I'd rather be taken seriously for my merits than my minority privileges (due to DEI for example).
> I'd rather be taken seriously for my merits
Me too. The reality is that people don't always take my merits seriously.
I'm male though. Females have it much worse. I have heard lots of horror stories (both behind their back in "locker room talk" and directly from them) where their actual merits are effectively ignored and all focus is on their body. It's insane.
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What we need are data. Then set up funds that scoop up the good ideas left on the table by this dumb money if it exists.
You're looking at it backwards. White people get an automatic advantage because they're white. Any advantages given to minorities are an attempt to balance the game.
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It is possible it is racism but it is likely to be measurement error, sampling error, and/or specification error, assuming you have not ruled those out.