Don't VCs see how incredibly destructive this is to the startup ecosystem?
I think the answer is somewhere between no and they don't care. The fact is many people including myself, dust themselves off and go for another round so the negative effect of destroying the market is offset by the fact that it can be almost an addiction to be in the market.
What they can do though is ruin their name to the point that they become a second rate player. Which is exactly where you run into most of these guys.
I got really emotionally involved in the Zynga story because of my history, which is unusual for me. But to me that issue was far more concerning to the industry than the bad VC's because that was most likely the VC's and the operations team working together to deprive other latter entrances for capitalizing on their risk.
In this case the very people that generally are on the receiving end of VC dilution, are perpetuating the same victimization. That has the ability to kill the industry, an entrepreneur will, take another swing but a developer who was never going to get as rich as the entrepreneur, getting screwed, is going to leave the industry and become a high paid developer. Then because options are looked at as a bait that can be yanked, developers are going to demand full market rate, plus the options just for passing over more stable gigs with established organizations. It's only going to take one more Zynga for that to happen.
If others follow Zynga's example, developers will demand that the industry pay the full price of the developers risk up front, that is going to limit the ideas that get funded, and it will be bad for everyone. But we deserve it if that happens, greed over humanity deserves destruction.
Not sure we can say that we "deserve it", but I see your point...there are always bound to be some greedy assholes who don't see the bigger picture. It's really fascinating (in a morbid way) how much less innocent the startup scene is today than just five years ago when YC was in its infancy and PG's startup essays were considered controversial.
There are just _so many sleazebags_ involved in startups right now. Of course this reflects the rest of the world, but it really pains me every time I see a naïve or just unlucky nerd get shafted by some unscrupulous authority figure. Maybe a crash would actually be a good thing, because it would scare off everyone who isn't in tech for legitimate reasons.
There are just _so many sleazebags_ involved in startups right now
There was a lot in the .com boom, maybe a little more now but history has a way of remembering the noble and valiant while only the super villains get their place cemented in history.
To me it seems about the same, the A players are for the most part respectable, the B players have some sleaze, and with the C players, well you better cover your ass faster than the new guy on D block.
I think the answer is somewhere between no and they don't care. The fact is many people including myself, dust themselves off and go for another round so the negative effect of destroying the market is offset by the fact that it can be almost an addiction to be in the market.
What they can do though is ruin their name to the point that they become a second rate player. Which is exactly where you run into most of these guys.
I got really emotionally involved in the Zynga story because of my history, which is unusual for me. But to me that issue was far more concerning to the industry than the bad VC's because that was most likely the VC's and the operations team working together to deprive other latter entrances for capitalizing on their risk.
In this case the very people that generally are on the receiving end of VC dilution, are perpetuating the same victimization. That has the ability to kill the industry, an entrepreneur will, take another swing but a developer who was never going to get as rich as the entrepreneur, getting screwed, is going to leave the industry and become a high paid developer. Then because options are looked at as a bait that can be yanked, developers are going to demand full market rate, plus the options just for passing over more stable gigs with established organizations. It's only going to take one more Zynga for that to happen.
If others follow Zynga's example, developers will demand that the industry pay the full price of the developers risk up front, that is going to limit the ideas that get funded, and it will be bad for everyone. But we deserve it if that happens, greed over humanity deserves destruction.