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by tschellenbach
3163 days ago
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1. Good companies won't pitch you, it's common for VCs to reach out to the top companies while they are not raising funding. So good luck running your analysis on data you don't have. 2. There are no metrics that identify a good from a bad investment. Maybe this would work in some cases for later stage investments. But even at the later stage the metrics are all over the place. 3. Companies applying to this VC fund will game the system 4. This is not a new thing, every VC firm looks at your metrics. |
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2. There certainly are good metrics, otherwise the basic tenets of business that have evolved over the past 5,000 years would exist. There may not be metrics that say if a certain product/service will be a smash hit or not, but it did not take a crystal ball to see that Pets.com was incredibly unsustainable, or that Groupon (and Blue Apron was too easy to replicate and thus overvalued, or that Juicero was an absolutely asinine idea destined for failure (massively overengineered squeezer that wasn't even necessary for their overpriced juice bags).
3. People game every VC system. Remember Pixelon? Theranos was WIDELY derided in medical and medical research circles from the get go. No way a 19 year old drop out came up with such a massive breakthrough in blood tests, she didn't even have the time to learn the medical basics. Faraday has looked sketchy from the outset as well.
4. This statement I wholly agree with, and it happens to back up my disagreement with #2.