boecher.de» english http://www.boecher.de   It's all about the internet...   Thu, 25 Feb 2010 22:00:00 +0000 http://wordpress.org/?v=2.8.6 en hourly 1 What VCs would prefer founders do… http://www.boecher.de/2009/08/26/what-vcs-would-prefer-founders-do/ http://www.boecher.de/2009/08/26/what-vcs-would-prefer-founders-do/#comments Wed, 26 Aug 2009 11:08:14 +0000 Michael Boecher http://www.boecher.de/?p=171 It’s my comment of the day, found at a Silicon Alley Insider article named “Hey, Look What Tumblr’s Done With All Its Money”. I have smirked reading this comment from Nicholas Carlson in response to “Anthony”. It reflects the stories I’ve heard from a bunch of start-ups of known identity, and honestly it seems to be often the way it goes.

The VCs told not to worry about revenue right now – a startup with revenues doesn’t need VCs – and here’s a refresher on what a VC would prefer founders do:

  • The Start-up ignores revenue.
  • The Start-up is running out of cash.
  • They ask a VC for cash in exchange for large handfuls of equity.The VC agree.
  • Than founders ignore revenue more, again. Run out of cash, again.
  • Shovel equity in VC’s direction, asking for more cash, again.
  • Optional: repeat steps 1 through 5.
  • The founders have to accept VC-picked board members.
  • The Start-up stops ignoring revenue.
  • The Start-up will be sell to other VC’s or at the friends at Google.
  • Next Start-up is ringing the bell. Let’s start again at step 3.

It covers in some cases my assumption and personal observations, but hey! I guess it’s the normal reality and the way the cookie crumbles.

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