Fundraising Advice from a Train Conductor
Pawel Chudzinski
471

Great metaphor, but for this bit that they: “do not care so much about the type of the train or where it comes from as long as they know that the destination is reachable on time” is false. They care, it’s one of the few things they have to judge (guess) on when betting on a startup (train), because it’s a betting game to a large extent that they engage in. And they care a lot about the chit chat & gossip at the station about the trains & their destinations ;)

— VCs care about the ‘type’ of train — right now they’re all herding over AI, few yrs ago about food delivery, & so on — they care about waves and trends, also because of major trend fomo, but also because they are risk-averse themselves & need others to coinvest

— VCs have a bias toward brands as signals of quality (ie. ex- google, stanford, facebook, etc..) ~ they heuristically use these as proxies for judging team/capability , but VCs don’t know much about the technology/technicalities esp. when it comes to funding breakthroughs, very few see and understand it. What’s worse, least for the Valley, they underestimate, and/or are ignorant, of talent from outside coming in without the branded pedigree but with moch power under the hood on the tech side. So I’ve learned that VCs are not master of every domain that they claim to be, except for their own domains — finance & scaling the business (if they're operators).

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