This was good. I especially like the discussion about the personal and career side of this, which I think is often under-discussed a lot. In the last ten years, people seem to be roughly aware of the gaps in the economic incentives (partly, I think, because people in Silicon Valley love nothing more than to say, "you see, it's a power la…
This was good. I especially like the discussion about the personal and career side of this, which I think is often under-discussed a lot. In the last ten years, people seem to be roughly aware of the gaps in the economic incentives (partly, I think, because people in Silicon Valley love nothing more than to say, "you see, it's a power law"). But I don't think people talk much about how VCs aren't strictly economic actors, and actually make a lot of decisions because of status, career ambitions, and, when they're on boards, because of the personal dynamics (and, it seems, often petty differences and insecurities) with other VCs.
Somewhat related, I just finished this book on quitting things. One of the central themes is that we often quit things way too late, especially when we're in the heat of the moment. One of the things VCs seem have done exceptionally well (for them, anyway) is to play that dynamic against founders, such that they persist well beyond their economic interests. In your $150m example, the rational choice for the founder is probably to sell. But if VCs can create a industry culture where selling then like giving up or losing, you can get founders to keep doubling down.
This was good. I especially like the discussion about the personal and career side of this, which I think is often under-discussed a lot. In the last ten years, people seem to be roughly aware of the gaps in the economic incentives (partly, I think, because people in Silicon Valley love nothing more than to say, "you see, it's a power law"). But I don't think people talk much about how VCs aren't strictly economic actors, and actually make a lot of decisions because of status, career ambitions, and, when they're on boards, because of the personal dynamics (and, it seems, often petty differences and insecurities) with other VCs.
Somewhat related, I just finished this book on quitting things. One of the central themes is that we often quit things way too late, especially when we're in the heat of the moment. One of the things VCs seem have done exceptionally well (for them, anyway) is to play that dynamic against founders, such that they persist well beyond their economic interests. In your $150m example, the rational choice for the founder is probably to sell. But if VCs can create a industry culture where selling then like giving up or losing, you can get founders to keep doubling down.
https://www.amazon.com/Quit-Power-Knowing-When-Walk/dp/0593422996