[marcosdumay]

Just a question: How do you expect to create new markets or any kind of real innovation if you only invest in companies whose products are similar to something you already worked with?

Maybe it's a goof thing angels are doing bigger rounds taking your place.

[lpolovets]

I'm an early stage VC, so I often invest at the same time as angel investors. I think there are shortcuts to getting an investment even if you are approaching a new market. Sometimes that means showing enough promise with an MVP (which often doesn't require much capital). Sometimes it's having an amazing team -- for example, a lot of early PayPal folks could probably raise money with just about any reasonable-sounding idea.

Also, investors typically invest in areas that they're familiar with, but that can be a pretty inclusive criterion. For example, I've personally worked on payment fraud detection before (as an engineer), so that makes me feel comfortable investing in fraud detection, but also credit assessment (similar algorithms), a large number of startups that involve lending or payments, and so on. For another example, my fund invested in Flexport (a recent YC company that handles shipping logistics for companies). My partners and I didn't have any personal logistics experience, BUT one of my partners worked at a company that struggled with imports and shipping, so he appreciated the pain point. Also, Flexport's CEO, Ryan, is a force of nature and had been working in the import/export space for 15 years, so he was very credible. That was enough for us to invest despite not having logistics experiences ourselves.

In the Airbnb example -- and I wasn't an investor 6 years ago so I don't know what their pitch was like -- I'm guessing if the founders had a bunch of lodging-related experience, or if they had previously built great companies, or if they had a few more data points that showed the viability of their model, that could've helped.

Finally, here's the challenge from an investor's point of view: you see 1500 pitches per year. The majority of the pitches mention something like "we're going to be a billion dollar company" or "we're going to create an entire new market." One or two of those 1500 companies will do just that, ten or twenty companies will get kind of close, and the other 99% won't be close at all. In hindsight, it's easy to look at Airbnb or Uber and think that investors were short-sighted. Maybe they were. But a lot of early stage companies look simultaneously promising and risky in their early days, and most of them fail, so investors understandable err on the side of pessimism.

[Fede_V]

Thanks for your point of view - that actually makes a lot of sense.

I really dislike the escalation of pitches. As you said, almost everyone says that 'we will become a billion dollar company' or similar claptrap - but that just means that people have to make more and more extraordinary claims to pierce the cynicism (fully justified!) of investors.

[marcosdumay]

My post turned up to be too confrontational, sorry for that.

I'm not opposed to VCs on abstract, and I'm happy to see people trying to do good work on the area. Your area is hard, and if you can improve it, everybody wins.

I also got widely off-topic, because I was complaining that todays VC wouldn't have created the Silicon Valley, not that they couldn't see Air B&B. That said, I'm still not convinced you are liberal enough to do this. (Not that you should.)