First Time Entrepreneurs Getting Screwed
Mike Arrington: "That first company I started made a lot of money for the venture capitalists – nearly $30 million – but next to nothing for the founders."I have heard this story from someone else I know. His first company got sold for a lot of money - multiples more than Mike's - but he made only a tiny bit of money in the process. In other words, he got screwed.
So do some VCs stay on a lookout for greenhorns to screw? Does the VC crowd have assholes? The VC crowd is just like any other human crowd. There are assholes in that crowd, sure. When the stakes are high, the assholes sometimes end up with pronounced presences.
The idea is to not take any money that comes along. Do your due diligence. Ask around. Negotiate hard. Be prepared to walk away.
First and foremost, build a good business. And stay alert, stay smart. Assholes come with reputations. Ask around.
In The News
TechCrunch: Are You A Pirate? Entrepreneurs, though, are all screwed up. They don’t need to be rewarded for risk, because they actually get utility out of risk itself. In other words, they like adventure..... That first company I started made a lot of money for the venture capitalists – nearly $30 million – but next to nothing for the founders. The companies I started after that varied between failures and mediocre successes. But at no point did I ever consider getting a “real job.” That felt like a black and white world, and I wanted technicolor. Also, I hate working for other people because I’m really bad at it.
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