Unpopular Opinion: VCs get a lot of crap for no reason
Kya dikat hai bhai, udane do paisa. Tumhare thodi hai. Good firms genuinely perform well and return money. The ecosystem is not forgiving -- you don't survive very long if you don't create any big wins. It's an extremely high stress job with very little WLB. You do make money but it comes at a cost. Layoffs are sad but at least those jobs existed in the first place? They wouldn't without VC money. India's VC scene is extremely young and it'll take time before we produce a Google. Entrepreneurs are not always right, they are not always nice either; but they definitely are courageous.
VCs kill many startups with unrealistic targets that the main problem. Not every business is designed to give ultra quick returns VCs want . They ruin well potential startups
Well all stakeholders - VCs and startup founders know the VC model before fundraising. They know that expectations from VC money is to grow to 100X exits or die trying. So its their choice actually
deadpm
Stealth
3 months ago
VC is not about building 100 SMEs that generate stable incomes. It's about disrupting markets and producing a few giant companies that make up for all the failed ones.
That being said, there definitely are loan sharks out there who screw founders in various ways. It is my optimistic view that in most cases, you have to be founder friendly to survive in the long run.
See more comments
LooseGoose
Stealth
3 months ago
While i do largely agree, VCs still owe it to the ecosystem to be at least somewhat responsible with investing.
Failures like Apna destroy credibility of other Indian founders as well, within and outside the country.
There are always deserving startups searching for money. Not funding them while funding copycats with zero innovation is hardly fair to the ecosystem.
deadpm
Stealth
3 months ago
Agree that they hold fiduciary responsibility that needs to be upheld.
Copycats/innovation bit is subjective and can only be said in hindsight.
LooseGoose
Stealth
2 months ago
Do you honestly think Koo was innovative in hindsight? It was an obvious failure from the very beginning to a lot of people everywhere
See more comments
DaringTrain
Stealth
2 months ago
No reason is not right. Let me tell you the right reasons:
- They raised the cost lf doing business. They poured money, which led to founders paying extravagant salaries to hire and retain talent (especially tech),which wasn't deserving or sustainable. So, companies which didn't raise money /have money to burn, suffered.
- They didn't show financial prudence. While they don't manage my money, most of the money they raise comes from non-profits / Pension funds in the US. They literally took money from teachers / hospitals / poor people and burnt it on unreasonable business models. And what's worse, they didn't ensure corporate governance. So they let fraud fester. This ia same as criticising PNB for PP Jewelers scam. They deserve to be punished.
- They enabled / wholehearted supported predatory business models like Byju's / Dream11 / Groww. So many Lower-middle class parents stuck paying EMIs because they were victims of mis-selling. Similarly for D11. 20 Cr people have transacted there once. Similarly Options trading in Groww. Acquire users under pretext of financial freedom and get them hooked on gambling.
Exactly bhai. Well written.
Governments scam karti hain to karne do na tumhe kya dikkat hai. Adani scam karta hai to karne do tumhe kya tumhare paise se thodi na kar raha hai.
Koi communal riots mei maara jata hai to tumhe kya dikkat hai, tum ya tumhare parivaar se thodi na koi mara hai.
Govt. hospitals mei achhi facilities nhi hai to tunhe kya dikkat hai? Tumhe to private mei hi ilaaj karwana hai na!!!
Never speak anything bad about the powerful and rich. Kyuki tum gareebo ko koi haq nahi hai, sirf ameer hi gyaan pel sakta hai podcasts par akar gareeb nahi.
Tum bas mazdooro ki tarah apni aukaat mei reh kar kaam karte raho.
jinyang
Stealth
2 months ago
While standalone all points are 100% correct, pointless example in this context.
- VCs aren’t investing out of my tax money
- You and I aren’t electing the VC stakeholders
- Adani and other large company scams matter because public is investing capital, it’s important to protect their downside
Not sure what point you’re trying to make here - innovation needs someone to attempt, that attempt needs capital, people underwrite the thesis and team and give capital in forecast of this bet paying off. Sometimes it does, most times it doesn’t because it’s insanely difficult to build large outcomes.
See more comments
hellotherehappy
Stealth
2 months ago
Semi rant incoming structured in 3 points
1. "Job creation": I don't buy the argument that these startup jobs wouldn't exist without VCs. If there's potential, talent, and regulations in place money will find a way to fund projects that produce a return.
But this very sentiment is what I don't get about VCs, they're not solely responsible for creating the ecosystem. Even if they are, what ecosystem have they created? An over worked, over stressed and over funded world which is not really innovative.
2. Forgetting the venfrure in VC: 90% of VCs have forgotten or don't understand the venture part of VC, they just back slightly above average risky business in the hope of getting extraordinary returns. Most VCs hoping on podcasts and talking disruption and innovation have done piss poor to fund something other than what are Western clones of startups in India.
3. Much noise, little signal: Some VCs are genuinely game changing for the entrepreneur but my view is they understand their role as a middle man money manager and stay out of the limelight and instead focus on the entrepreneur. But they are literally 1 in a 100.
Also what is this we are a young ecosystem Argument mean? It's as mature (been through at least one 15 year cycel) in terms of talent and experience as any other ecosystem. Nobody expects a Google from India, just a decent return that's sustainable for the ecosystem but the fact you need an American firm to buy an unprofitable business in Flipkart to produce most of the returns in the ecosystem is telling not just about VCs but the startup entrepreneurship in India.
Bitter Conclusion: Maybe I'm naive and I'm not founder material or whatever but I think overzealous VCs and misguided entrepreneurs have ruined a generation's health and wellbeing in trying to get outsized returns for wealthy people.
jinyang
Stealth
2 months ago
Founders who cry foul over VC pressure conveniently forget they signed up for it. Taking VC money means agreeing to ambitious targets.
Had read a quote somewhere on Twitter, "If you want to build a lifestyle business, don't raise venture capital" - so true, no one’s forcing anyone.
VCs aren't charities - they're investors expecting big returns. Can't handle the heat? Bootstrap or find alternative funding. But don't blame VCs for holding you to the deal you made :)
Neo1
Stealth
2 months ago
I know in someone Bangalore VC close circle very popular VC slept with influencer founder later got to know that founder ended up raising 10CR next month 🤷
+1 agree with sentiments. Pirates (founders) need some free space and resources to build things outside of city wall.
Fraud and predatory hiring practices is something we all should call out. But otherwise business not working out or finding pmf is okay. Even LPs know that investing in startups is risky and all of them have signed up for it.
BiryaniEnthu
Stealth
3 months ago
First line, and mic drop!
"high stress job with little WLB". That's every job out there today that pays decent money. And, nobody put a gun to their head to do the job. They are doing it because they want moolah in their account.
VCs are predators and nothing more, so treat them like one. Most don't have a basic sense of ROI, 7/10 times most people can say whether it would be a startup worth investing or not just by going through their website/LinkedIn in detail, not the phony ppts that they spend time seeing all day.
Node
Stealth
2 months ago
India won't produce a Google. It can only produce cheap clones of good companies from the west and they'll be have terrible work culture.
BasicTab70
Student
2 months ago
Long term mein dikkat hoti hai because of loss of credibility.
AcidicMop
Stealth
2 months ago
VCs are all huff and puff and no knowledge. Having worked with a VC turned founder I can vouch for this statement.
Thing is VCs are only interested in valuation of company not the value company creates for others. VCs are only interested in how they can exit and make lot of money. VC expect if a woman works hard and has best resources she can birth child on 1 month but that's not how it works.
Megamind007
Stealth
2 months ago
Name a startup so visionary and contrarian that could be actually global and worth $50B and Indian VC have done pre-seed round.
Where is the ambitious VCs in the Indian startup ecosystem? I want names who bet on pre-seed startups just by the length and breadth of their vision and plan of action.
I am building something visionary yet somehow I don't feel any good about raising and doing it here, in India. And it's just another social network, but a reinvented Craigslist.
job do na bhai aur kuch nai are to sikhaoo na bhai aur salary bara ne me kya problem, hai \
Discover More
Curated from across
