The greatest trick that VCs ever pulled is convincing startups that down rounds are a disaster. Plus, pricing, again.
Mr. Worldwide says fish or cut bait, Stancil
Benn it seems there is a general trend towards "raise less, build more" as a pendulum swing away from excessive finance. eg https://trohan.com/2023/08/20/raise-less-build-more/ not canonical source of the idea but just the top of the pile on my reading list
I wonder what the impacts of that look like for startups? Some guesses but would love your take here.
Better products - products like dbt had pretty good potential but pretty much didn’t materially change at all once they took VC funding, I wonder if this is common? Would they have done better to stay lean?
Less money in the ecosystem - a huge part of software success is predicated on selling to other well funded startups, creating a flourishing ecosystem that can then “escape” and sell beyond that. If companies take less funding, there will be less money to spend on other startups, meaning the ecosystem as a whole is less funded, less dynamic. Analogy would be that only the strongest “weediest” survive in this “garden”, rather than creating the environment where roses can thrive... (low effort visual). Weedy in the sense of uncreative or unoptimised. Would we see the organic and creative destruction that leads to some great innovations? (struggling to imagine one, ChatGPT?)
VC industry - I don't know. Stops working? They need companies to return the fund. This would kill them? Maybe not, maybe it leads to better outcomes. This is where my insight falls short.