Seed stage VCs stress waaaaay too much about competition. Most markets are enormous and not winner-take-all.
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One VC asked us to fill out a four page “competitive analysis” on how we would stack up against a competitor. We’re already bigger than them and it’s been four months.
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Replying to @AustenAllred
Anyone asking you to fill out 4 pages at seed stage has no idea what they're doing
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Replying to @AustenAllred @zebulgar
Turns out it’s not incredibly difficult for people who have made a lot of money outside of startups to raise a $10m fund from Chinese and Arab LPs
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Replying to @AustenAllred
Everyone talks about the Bitcoin bubble. The proliferation of $10 - $50M seed funds is the real bubble.
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Replying to @zebulgar @AustenAllred
I’m happy to be competing for allocations with people who want founders to write essays.
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I’m fascinated by the funds that have embraced the post-YC spray and pray. Find the top n% in a batch by asking around or looking at traffic or something stupid, write $100k checks into all of them. We had 3 or 4 of those. Brainless, but then you’re in Cruise, so...
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It takes a special form of smart to be able to say “Incentives for VCs cause them to maximize for prestige and not for return. I’m going to invest for return and, when people make fun of me, I shall dry my tears on money.”
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One walked me through me their model. Historically it basically looks like YC just with 20x worse returns, which crazily enough is still solid.
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