Three of our worst VC stories

I started a new company with my cofounder 6 months ago. We focused on what people wanted, built a manual solution then automated it. We have 60% margins and a system ready to scale. We are thinking of avoiding investments. I am not sure if we are in a new moment in time where investments are something people do because of what used to be the best to do. And I am not saying avoid blitzscaling but do it without external capital. The hypothesis is that a small team, Claude Code subscriptions, apis and automation/code are enough to make it work via profit reinvested from sales. And it will be actually a competitive advantage because of removed costs, mostly from coordinating a lot of humans and having outside forces pulling in different directions.

I once had a VC ask to meet my founders and I for his morning breakfast at a run down diner in texas. So we fly out from Florida pitch deck in hand, and meet him at his booth.

We pull out the deck, he says "Do not need that. How many paying customers do you have?"

Given we were at MVP stage and were running a public sentiment analysis driven social media search engine using our published academic AI work (15 years ago) we said "None yet. The capital to build the paid portion of our product, which is popular, is why we are here."

As he eats his eggs he goes "Come back when you have a hundred or more paying customers" and sent us packing .

Not even a 5 minute interaction with people he asked to fly out to pitch him, and were not even allowed to pitch.

I expect rejection by default at an early stage, but that one was particularly mean.

It will forever remain my go to example of a meeting that could have been an email.

One excited investor we did find for another project ended up being the now famous con man "Michael Prozer" who got on who wants to marry a millionaire using forged bank records and proceeded to get actual capital based on this lie until he was arrested for fraud.

My opinion of VCs is still... recovering. The bar is in hell.

#3 is insane, if for no other reason than the VC is signaling that he’s likely going to try and do the same thing to you some day… even if you were totally willing to screw over your team, why would you ever get involved with that VC given you’ll then have to watch your back until the end of time?

All I ever hear are horror stories. Can someone tell me a good story about VC that isn't Facebook or something?

The first I heard of Cloudflare was a recommendation from someone who used to DDoS websites (and yes they've been arrested for related crimes, long story), and I thought "what the heck is Cloudflare" then over the coming years, I kept seeing other friends using it. It's really interesting that Cloudflare was able to pop into a market that Akamai could have snagged for themselves or outright tried to buy out Cloudflare.

It's a bit crazy in hindsight that companies would have avoided investing, considering this is a space someone like Akamai occupied, and clearly there is value in this space. It's incredible to see how Cloudflare has grown over the years, kind of happy they grew as much as they did, a bit surprised by some of those VC nightmare scenarios.

I hear story #1 periodically, but almost never see a quote. How is this stuff said specifically? It always seems like hearsay. I'm sure it's authentic, but I'd love to hear the details on how that stuff is actually said in conversation.

I doubt VCs have different distribution of personal character from other professional groups.

In my experience, a more interesting friction is that VCs are pursuing a diversification strategy while founders are pursing a singleton strategy.

After reading some of these stories, I don't see how you can't come away thinking that psychopathy is a trait that goes hand in hand with being a successful VC. The story about Vinod Khosla speaks for itself, but after reading #2 I clicked on Marc Andreesen's twitter profile, which currently says this:

> You’re not talking to someone who woke up a loser. That loser attitude, that loser premise makes no sense to me.

These fuckers are grotesque caricatures in human skin.

theres always a story behind the story. wondering why he chose today to say these

These VC stories continue to feed my incredulity at how people _that_ incompetent can still be _that_ wealthy.

Is it the money that makes them stupid or smth?

East Dakota is Western Minnesota. This is MAGA country

I could write a book with the horror stories I have of VC and LP behavior, and some of the wild stuff I’ve either been asked to do, verified others were asked to do or say it’s just totally unhinged.

I don’t know if Angel investing groups are really still around like they were in there 2010s but the variance in the types of insanity and weirdness for those groups is really unmatched.

Did the author edit the tweet/post or am I crazy? There are only two stories

More and more I see why bootstrapping is the way to go. And especially in this SaaSpocalypse with AI companies commoditizing entire companies with new feature releases like Claude Design or Codex for legal, it's better to just run your little corner of the Internet and make sustainable money over hyperscaling with millions and billions and being put out of business the next week.

One might say why bootstrappers won't get erased too but they can carve out a specific market too small for AI companies to want to touch, and still remain sustainable rather than needing to make a ton of money; and pivoting as a venture backed company can be much harder as there are more people to please like investors and your employees which you likely have more of than a bootstrapper.

what is the "meeting scheduled on Monday clue"?

Link for non x users:

https://xcancel.com/eastdakota/status/2062860530360959273

Next up, one of our worst CEO stories

HN policy is to link to the site. If someone wants to use an archive service they’ll use it, meanwhile most of us want to be able to reply, follow, read etc.

As bad as these VCs seem to be it's something to see Prince socializing with other bad actors like Maguire while lamenting the bad actors in the space.

On one hand, every VC who passed on Cloudflare missed out on what is now an $88 billion company. On the other, if they didn't invest because they didn't like the underlying economics, they were actually correct. 17 years after founding, Cloudflare still has never turned a profit.