Founders worry too much about highly funded competitors. Usually funding matters less than the founders' ability. In the short term, a highly funded competitor can hurt you by e.g. lowering prices. But if you survive long enough, it will ultimately become a test of ability.
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Problem is that mediocrity sometimes takes a while to show and can be covered up to a large extent for quite a while by that money
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A great one, without a doubt. But for first time founders, there is no track record to prove greatness. How do they convince the talent that they are better than their highly funded competitors?
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By definition. Part of being a great founder is being convincing.
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We should never forget how Chamath leaded Facebook to the first 500m users
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One factor feeding into that decision would be how much each could afford to pay me.
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It's a trick question. If by "less" we mean "not enough", then why can't the great founder raise enough money? Isn't that part of the job, hence what would contribute to their greatness? But, if less includes enough, then there's no dilemma here: go with great.
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There are at least three ways great founders might have raised less: if they chose not to raise as much, if VCs misjudged them, and if they were in a place where there wasn't as much VC to be had.
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The question here is the delta in funding. But, still, your point stands there are very few winner take all markets IMHO.
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I have spent my entire career fighting with and most of the time beating better funded competitors! Find their Achilles Heel (everyone has one) and sell the hell out of it.
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