The Founder’s Dilemma

The Founder’s Dilemma: If You Can’t Network In, You Can’t Raise?

When raising venture capital, VCs say they look for “signals” that predict success.

Recently on a podcast, a well-known investor of @a16z Marc Andreessen suggested:

If you can’t network your way to us, you’re probably not investable.

Let’s unpack that briefly.

A large percentage of venture capitalists come from institutions like Stanford, 40% actually. The probability that someone from a lower-mid income background has direct access to those networks is objectively low.

So what’s the real signal being rewarded?

Look…I come from an impoverished background. What I’ve had instead is relentless drive and a refusal to stop learning.

That doesn’t show up in a warm intro email. VCs maybe looking for signals basted on industry normal.

But here’s the uncomfortable question:

If the pattern recognition model is so strong, why do most funds underperform?
Very few consistently deliver 10% IRR like Sequoia‘s 30%.

The majority of investments never meaningfully return capital. Most firms never have an exit. 93% of VC’s have never founded a company. If 90%+ of outcomes fail under the current filtering system… Maybe the signals are wrong. Group think isnt working. Is it?

Maybe the industry optimises for familiarity, not breakthrough potential. The power dynamic is shifting. Great founders now have more leverage than ever.

And founders should evaluate VCs just as critically as a partner on a journey:

With respect to everyone – I’ve had the privilege of spending time with some highly academic’s PhDs, Professors etc with an average h-index of 20+. Many are exceptionally intelligent, but often very theoretical and deeply in their own heads. Can they execute?

A big-brand CV doesn’t automatically translate into strong performance in #startups.

Are VCs optimising for the right signals and missing out on loads of talent and you?

#startups g#venturecapital #founders #deeptech #innovation