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The problem with taking seed money from big VCs (cdixon.org)
16 points by nreece on Nov 10, 2009 | hide | past | favorite | 6 comments


We've discussed this before, wrt YC: http://news.ycombinator.com/item?id=897115


[deleted]


Not entirely. The point of the article is that, big VCs have strong name recognition, and should they invest in you in the seed stage, they can refuse to give you further funding and no other VC will step in to help you because they will wonder why your initial investor, who knows you best, didn't step in and keep investing. So the big VC has de facto monopoly "dips" in your company.


That suggests there is some kind of optimal path in which financing to choose from what supplier at a certain stage, but I think that to be associated with a large VC usually should compensate for the downsides during a follow up round.

Simply approach another VC after getting financing from the 'first big one', and make sure that you are allowed to do so.

VCs love to be #2... getting them to be #1 is the hard part.


That's not what the article is about.

There needs to be a name for when a commenter makes an obvious point on an article that is delving into fine detail.


In your experience/opinion, does Dixon's argument (in the OP) hold water?


It is possible, yeah. Lots of VCs overweight signals from other investor's behavior. Not all of them.




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