Venture Hacks

… a founder, a VC, and his Associate negotiate a down round. Very NSFW.

Video: Old Face Andre talks economics with Omar
Another business lesson from The Wire — about intellectual property: “It ain’t about right, it’s about money.”

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“[Recessions] can cause people to think more about the effective use of their assets. In the good times, you can get a bit careless or not focused as much on efficiency. In bad times, you’re forced to see if there is a technology [that will help].”
– Craig Barrett, Chairman of Intel

Water hides the rocks at [...]

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In 1936 (!), old-school economic giant John Maynard Keynes described the spontaneous optimism that drives startups:
“A large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over [...]

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In Be Careful Who You Deal With, Matt McCall, a Managing Director at DFJ Portage, has great advice for entrepreneurs who are dealing with “slimy bottom sucker” investors:
“As these markets continue their chaotic path downward, people’s true colors come out. Some people show increasing amounts of fairness and consideration. Others will self-optimize and use every [...]

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“If you want to improve your chances, you should think far more about who you can recruit as a cofounder than the state of the economy. And if you’re worried about threats to the survival of your company, don’t look for them in the news. Look in the mirror.”
– Paul Graham

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“Over the past few months, I’ve witnessed the experts and the media bemoan and belabor the “tough economy.” My attitude in times like these is to stay focused, stay optimistic, ignore the media and operate as normal. We’ve done a great job of doing these at Infusionsoft and it’s paying off. We had our best [...]

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“Financings are blowing up, terms are being renegotiated, venture lenders are getting more conservative, and existing investors are stepping up to fill the gaps…
“I guarantee that there are some financings happening right now that are getting done at valuations which would have made sense nine months ago but don’t make sense right now… I also [...]

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“Spend every dollar as if it were your last.”
– Sequoia Capital
“A business plan that doesn’t require a wonderful economic environment in order to succeed… is a good idea all the time.”
– Marc Andreessen
Summary: In good times and bad, startups should be asking themselves the same questions: (1) What’s our runway? (2) What experiments are we [...]

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