Right. VCs are involved in one stage of the formation of companies, with repeat games. This creates certain incentives and biases. One such incentive is to drive hype for other investors. And one bias is that they tend to see startups and founders as a homogeneous cohort. This is normal, but should not be touted as gospel any more than other players.
The weird undertone that permeates the debate around VCs is that they are somehow the embodiment of some deeper wisdom – that others should pay attention for some universal reason – that they sit on the key to success. It’s just a particular type of player in a market economy. There’s absolutely nothing special about them. Of course they have something to say, like any other profession. But when the thought leading leather jacket comes on, and hot takes start to replace actual semantic sentences, it’s time to tune out.
VCs can act as gurus for a certain sort of idealistic founder types who also have a need for validation. VC funding resembles the traditional form of validation that we are raised with, namely an authority figure conferring acceptance. I can see this as a hedge against the extreme uncertainty of starting a new venture. However, IMO, this need for approval from authority as an adult is ultimately psychological vulnerability and it is exploited.
Obviously, not every funding case is like this. But when young founders lead more with who has funded them than what they’re building or done, I have to wonder.
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Right. VCs are involved in one stage of the formation of companies, with repeat games. This creates certain incentives and biases. One such incentive is to drive hype for other investors. And one bias is that they tend to see startups and founders as a homogeneous cohort. This is normal, but should not be touted as gospel any more than other players.
The weird undertone that permeates the debate around VCs is that they are somehow the embodiment of some deeper wisdom – that others should pay attention for some universal reason – that they sit on the key to success. It’s just a particular type of player in a market economy. There’s absolutely nothing special about them. Of course they have something to say, like any other profession. But when the thought leading leather jacket comes on, and hot takes start to replace actual semantic sentences, it’s time to tune out.
VCs can act as gurus for a certain sort of idealistic founder types who also have a need for validation. VC funding resembles the traditional form of validation that we are raised with, namely an authority figure conferring acceptance. I can see this as a hedge against the extreme uncertainty of starting a new venture. However, IMO, this need for approval from authority as an adult is ultimately psychological vulnerability and it is exploited.
Obviously, not every funding case is like this. But when young founders lead more with who has funded them than what they’re building or done, I have to wonder.