Couldn't agree more with this point. This is something that many people, the OP (or post writer included), seems to always miss.
VC isn't an emotion game that is driven by jealousy - any more than any other business is driven by jealousy. It's driven by simple economics.
In order for a fund manager to return any money, they have to look for the deals that will compensate for 66% of their deals that go sideways (or tank). Ironically, some probably push all of their portfolio companies to try and achieve this which leads to an increase in the number of companies they have that goes sideways.
But I hardly think they are all sitting around saying..."Gosh Darnit...I never got into Facebook...so here is $5M, add on this Facebook feature."
People that think like that, you can usually tell from having a 10 minute conversation with them. If you take their money after that, then that's your problem. Money comes with strings.
Once you understand what VCs are looking for, it makes it easier for you to align your goals with theirs.
That's why Github never raised money until just now...because they understand the economics that VCs are looking for. They believe, rightfully so, that they have a strong chance of being that company for them.
A16Z, doing that deal, could easily be one of the best moves they ever did. That was a stroke of genius, all around.
VC isn't an emotion game that is driven by jealousy - any more than any other business is driven by jealousy. It's driven by simple economics.
In order for a fund manager to return any money, they have to look for the deals that will compensate for 66% of their deals that go sideways (or tank). Ironically, some probably push all of their portfolio companies to try and achieve this which leads to an increase in the number of companies they have that goes sideways.
But I hardly think they are all sitting around saying..."Gosh Darnit...I never got into Facebook...so here is $5M, add on this Facebook feature."
People that think like that, you can usually tell from having a 10 minute conversation with them. If you take their money after that, then that's your problem. Money comes with strings.
Once you understand what VCs are looking for, it makes it easier for you to align your goals with theirs.
That's why Github never raised money until just now...because they understand the economics that VCs are looking for. They believe, rightfully so, that they have a strong chance of being that company for them.
A16Z, doing that deal, could easily be one of the best moves they ever did. That was a stroke of genius, all around.