[pge]

I wouldn’t trust these data, not because there is anything wrong with the analysis but because the inputs are inaccurate. What VCs say was the reason they were interested is not necessarily what made them interested. It may be what they tell themselves or tell you, but I think the decision criteria are rarely that objective or explicit. Decisions are made, then back justified with a plausible explanation.

[wpietri]

100% agreed. Most VC funds are necessarily good at very specific skill: convincing people who control lots of money that the VC is smarter and better than their competitors. The easiest way to sell that is to truly believe it, and then perform that belief convincingly. That's not something one switches on and off, so their answers here are likely to be skewed in the direction of things that make them look valuable.

Things like "team" and "gut check" are especially useful answers for that, because a) it lets VCs sound like intuitive geniuses who can't easily be replaced, and b) the I-know-it-when-I-see-it nature of those lets VCs smuggle in all sorts of irrational biases. As one well-known investor said, "There was a guy once who we funded who was terrible. I said: 'How could he be bad? He looks like Zuckerberg!'" Points for honesty, but you can bet that wasn't the official reason they invested.

[racecondition]

In general I agree with you, but I would say that alot of VCs either

1) diversify their investments amongst many areas in tech (or maybe some non tech things, not stereotyping all VCS but for this example I'll say diversity of problems being solved using technology/software etc) and thus see commonalities of problems amongst teams in their experience despite whatever the specific niche industry is. I think it is pretty important to agree the cofounders are important. Specifically I've heard from CEOs of startups I use to work for they are really good at hunting out "weaknesses" in the bonds between cofounders.

Basically, they don't want a good idea to fall apart because two cofoudners fundamentally don't see eye to eye, which will make it hard for any decisions they make (whether good or bad) to come to fruition and indicates future struggles with the company, in addition to weak leadership/unified approach when hiring new people, who might be disoriented at understanding the direction the company is going in.

2) Focus on particular niches (a startup who focus specifically on funding AI startups, for example) often they will even fund competitors knowing that if one of them dies, they are almost gauranteed to reep benefits from the remaining on in the niche field. This also means they keep a close track on the variations between two or more companies approach in a specific industry and why one failed and the other didn't.

Someone from Marc Andreessen's team recently published a blog post going into great depth about 5 factors amongst ten or so AI teams that indicated their levels of success in the field, and most of the tilting factors are not what I would say is common knowledge amongst AI startups.

They may have their biases, but they also have unique experience in understanding or seeing repeated dynamics in what could make a relationship (between cofounders) fail (like seeing that one bad relationship where the couple can't see it but it is so obvious to you because youve either now been through it or seen it happen before, imagine this for VCs looking at cofounders over and over again for ten years...) and otherwise have lost lots of money over failed business ideas, so I would say they are incentivized to be as objective as possible with themselves, even if just selfishly for the benefit of their own bank account.

[wpietri]

If your point is, "Some VCs can be good at their jobs," I definitely agree. My point is more that all VCs have a strong incentive to appear to be good at their jobs, especially in ways that sound impressive and are hard to verify.

[racecondition]

I think you could say that about anyone.

[wpietri]

I really couldn't. E.g., I've hired a number of programmers who are terrible at self-promotion. And even many of the ones who are good at it talk about specific, verifiable, repeatable skills.

[racecondition]

yeh I guess nerds are an exception to the rule, but honestly relative to all of the industries out there outside of engineering alot of business, marketing, etc etc is fluff. VCs are in business and finance.

At the end of the day, they have money. Assume they are selfish and want to not lose money, so they probably have some rationale on which they give out money in hopes for a return on investment. That being said, I've seen way too many tech bros with bad blockchain ideas get way too much money which usually goes straight to their heads before they lose it all, and I assume the V.C.s have a really good strike price and know exactly when to liquidate.

For others, it was my general understanding VCs lose money on most investments, hoping that a few end up going really big and canceling out the losses on the rest, but I don't really know anything about VC stuff. I'm not sadomasochistic enough to try to start a company, I just try to work on my skills and people are willing to pay me to invest in myself because I tend to discover interesting things while I tinker about and also keep things from failing often in a raging dumpster fire but I don't know if thats a good way to market my skills.

[spekcular]

Could you please give a link to the blog post? I'd be interested in reading it.

[dclusin]

Really surprising your username wasn't taken!

[racecondition]

lol I know me too I just made it up to type that comment and it was the first thing that popped into my mind.

[tlb]

"Looks like Zuck" meme debunked at http://paulgraham.com/tricked.html

[wpietri]

That's disappointing. I knew it was a joke, of course. But I took it as an acknowledgement that he, like all of us, has irrational biases that we discover over time. I'm sorry to see that it was much less than that.

[doh]

It reminds me the “wrist snap” practice in tennis. I don’t remember the exact details, but it started because a successful tennis player said that’s what he does. Shortly after, thousands of trainers were teaching the method breaking wrist of naive students. It took high speed camera to confirm that no players use it [0].

The point is that people micro-tweak their behavior based on simple reward mechanism. Most can’t explain how they got there.

Top VCs are no different. They remind me chicken sexers (is that even a word?), who have differentiate gender by looking at their bottoms and quickly able to tell without ever being able to explain how they know [1].

With this long dribble I want to encourage founders to develop their own intuition. Create a pitch that makes sense to you and then tweak based on feedback.

[0] https://www.tacticaltennis.com/tennis-mythbusters-wrist-snap...

[1] https://www.businessinsider.com/the-incredible-intuition-of-...

[ceonyc]

Tweak based on feedback is exactly right!

Only problem is that VCs normally don't give any!

[doh]

What I look for is behavior rather than verbal feedback. I know where I have hit spots in the presentation. If they don't react, then they are not as strong as I thought. If they react negatively, I know I didn't explain them well.

But yes, most VCs will never bother follow-up.

[btilly]

The following passage addresses your concern.

We analyzed the results of our first 500 reviews and calculated the correlations between high marks in categories like team, problem area and business economics with the number of requested intros from our reviewing VCs.

In other words the individual factors were graded, and the VC chose whether or not to meet. They are correlating the ranking of the components with the likelihood of asking for a meeting. They are not relying on the VC explanation of why they asked to meet.

I am curious who graded the proposals and how consistent that was. It would also be nice to see what good vs bad looks like in each category.

[brlewis]

Yes, that's an important distinction. At the same time, if VCs graded individual factors, those grades could themselves be rationalizations. For example, they want to meet a founder, and give high marks to the categories they think should be important, not the factor that actually influenced them.

[ceonyc]

They actually weren't "grading" per say. They were answering questions like "Have you seen anything else like this?" and rating teams with multiple choice answers like "This is one of the best teams I've seen." So, they kind of know how a company did, but it's not like they were looking at their own scores at the end.

[derefr]

Sure, but at the same time, the relationship between founders and VCs isn't actually adversarial. VCs want founders to know how to pitch them. VCs are not “anti-inductive”† — they’re not shifting their requirements to become stranger and more complex every time they’re understood. Their needs are fairly stable. The main reason that most pitches don’t succeed, is that most founders are first-time founders, and therefore don’t have experience at pitching, and therefore make newbie mistakes.

† https://www.lesswrong.com/posts/h24JGbmweNpWZfBkM/markets-ar...

If you’ve ever heard publishers talk about the https://en.wikipedia.org/wiki/Slush_pile submissions they receive, it’s much the same: they have clear and stable and “knowable” expectations, but authors break them, because most authors are new authors submitting their very first manuscript, having never gone through this process before, never received feedback before, and so never had any data with which to polish their approach before.

(The other main reason that VCs and publishers both receive so many pitches they don’t feel fit them, is that the markets they operate in are heavily slanted in their favour, and so they don’t put much work into making their requirements known. They often don’t put their expectations on their websites or anything. This can be circumvented on the supply-side, though, by just asking around to find out from other submitters what a given buyer is looking for. Some enterprising souls have even done the “lazy” supply-side’s work for it, and compiled indices of the requirements for the buyers in the market.)

[tlb]

Yes. It's like, if you analyzed reasons for romantic breakups, you might conclude many were "It's not you, it's me". Which is not "the reason" in the strict sense of a single condition that, if you constructed a counterfactual scenario where it wasn't true, the breakup wouldn't have happened.

[burtonator]

When interviewing people and giving feedback there's a non-trivial percentage of people that react with hostility to even the most constructive criticism.

We're actively recruiting now and it's amazing the amount of hostility we receive sometime when someone is rejected.

There's a HIGH false negative rate on our end. Meaning, we're going to screw up and walk away from candidates that are amazing - but we're unable to realize it in time.

Yet, people will still react negatively.

If I was a VC I would probably quickly learn to just keep my mouth shut.

[Zenst]

The fact they attended the meeting already shows they are interested. What maintained that interest to the end is as you say a many forked answer and what they tell you and what they are actually thinking will be different.

They may have your company in mind to work with another company they know/own down the line, or the other way around and with that, see which one works well and breakup the other. That they won't outline at the start and yet would be a reason of interest in buying.

[wmeredith]

I came here to say this. User-reported data is unreliable at best.