There is a difference between what VC's claim they look for, and what they actually look for. What they actually look for is momentum and all these conditions are 'bent' when that weird FOMO feeling takes over.<p>Anyone who thinks that all this data is pertinent to make the investment decision will most likely never say yes to any startup.
I don't understand.<p>> What’s the difference between a great idea, and a early-stage VC-fundable business?<p>Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype.<p>But hopefully they already have customers.<p>> If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and an organization that can operate and adapt effectively without the founder driving every decision.<p>In my mind I want to build a company with as little employees as possible with as much profits as possible. Is the way to do that really by employing an "executive team of leaders"? Isn't it just better to hire people that are productive and don't really need supervision in order to get things done?<p>Later on the author writes about an IPO, which is something that feels so far from the initial founding stage that it is useless to think about?<p>I wouldn't want to build a company if the only goal is to complete an IPO as soon as possible but maybe that's just me.
> What’s the difference between a great idea, and a early-stage VC-fundable business?<p>I think we forget that a restaurant can be a great idea. It only makes sense for a restaurant to be an "early-stage VC-fundable business" if it's going to turn into a huuuuuuge chain.<p>But more importantly, the story of McDonald's rings true: McDonald's founder didn't do the work of expanding the chain.<p>In the VC world, a successful investment has a 10x return on the investment. A great idea may turn into a great small business with organic growth. It can provide for a career without needing VC investment! This can be a small group of consultants, or someone who builds an SAAS business.<p>(Edit) But, the thing about restaurant vs tech is that there's plenty of room for 1000's of small burger joints to co-exist with McDonald's. It's a lot harder for 1000s of "Joe's Git hosting" to co-exist with Github. Thus, it's often harder to see how a "great idea" in tech can turn into a small no-VC business.
The cynicism in this thread makes me feel a little more confident that even if there was a bubble, its going to deflate, rather than pop.<p>A theory of mine is that really what we're seeing is a change in attitude about corporate governance and business building as the VC money from <i>outside</i> the SV bubble becomes increasingly relevant.<p>Discussion of founder-friendliness recently seem to back that up in my mind. If FF attitude is going away, it is because of declining influence of the SV venture crowd controlling the narrative about their own special sauce and the right way™ to form a company.<p>Increasing diversity of LPs and VCs from outside SV are bound to have an effect on the attitudes toward companies being founded. Posts like this seem like justifications for existing behaviors, rather than a playbook based on any evidentiary burden.
The link to the Blitzscaling[1] article interviewing Reid Hoffman is a nice read. Good comparisons how Microsoft / Amazon / Google scaled up in terms of company org and even more insight with PayPal's customer service growth outside of Silicon Valley.<p>[1] <a href="https://hbr.org/2016/04/blitzscaling" rel="nofollow">https://hbr.org/2016/04/blitzscaling</a>
I read that page as "Here are a bunch of reasons why our answer might be no. Don't do this stuff. Don't talk to us if you haven't figured out these basic issues." It's not about how to get to yes. It's about how to get past no.<p>You get to yes by already being pretty successful, or for complicated subjective reasons that add up to apparent promise.
The 'no market need is key'. I am remembering when I started my first business after graduating college. It was a retail business. The day before we even opened people were knocking on the door wanting to come in. Everything else that happened afterwords just flowed from that. It was really just simplistically executing and making it happen.