Video: Angel Investor Chris Dixon on Startups & Why the VC Model Is Broken

15 thoughts on “Video: Angel Investor Chris Dixon on Startups & Why the VC Model Is Broken”

  1. His comment about Twitter was incorrect and aimless. Twitter is not randomly killing anyone they are trying to build their business. it just happens to be the case that Chris doesn’t like it. Well, tough sh**!

  2. It’s hard to believe that one person can issue so many absolute truths. For example, run when Wall Street types start a company. But then look at Nate & Natty, as described so well by Brad Feld:

    http://www.feld.com/wp/archives/2010/04/learning-to-program.html

    I don’t think any one person “gets the rules” for the rest of us to follow, even if they’ve been successful. Perhaps they learn a thing or two; but then they may fall again.

  3. Its a good balance to have other opinions about the venture capital/entrepreneur universe. I appreciate hearing Chris’s perspectives & revelations. It may also break the bubble of other’s idealistic preconception of it all??? Nice….

  4. The interesting thing about the last quote is that every single VC will say they are like Ron Conway. I mean, ask VCs to put themselves in either bucket – do you think any will self-select into the latter? The problem is that most “extractors” are not very self-reflective.

    It’s going to be really funny – I predict that in the next six months VCs start saying stuff like “I am a builder, not an extractor”. Lol.

  5. I respect the balls on this guy when he takes a shot at Benchmark (which I’m sure everyone agrees with but no one has the balls to come out and say in public like this). Good interview.

  6. Watched the vidoe, loved the interview and admire Chris for hitting it stariaght from the gut. He makes a lot of sense and I fully agree with him when he says entrepreneurs shouldn’t start a business with the goal of flipping it.Business should always start on a notion of creating a long lasting profitable value and transforming things which rewards all those who are involved and not just a few. It should be a luanching pad to make all those who rolled up their sleeves to work on the idea a sucesss becuase that is where true satisfaction comes to see commom people around you flourish as well.

  7. Smart guy and some good comments. But, his comment about builder vs. extractor is interesting. Ron invests in literally 100s of companies. Given that, how in the world can he really help them build the company? He can’t – not enough time in the day. The evil VCs that Chris is talking about are typically invested in only a few companies at a time and can at least spend the time to “try” to help even though I assume Chris would just assume they are going to F it up.

  8. Hi Chris,

    I am a law student at New York University doing a case study for my Deals class on angel investors. The goal is to produce a final product that looks something like a Harvard Business School case study and captures the essence of the decision a promising entrepreneur faces when considering whether to apply to Y-Combinator, Techstars or an angel investor.

    I am looking to interview a number of people in connection with the project. If you are willing to have a chat either in person or by telephone then I would be extremely interested in hearing from you.

    Alternatively, we have outlined a few quick questions we would like to ask you below. If you are able to complete these then this would be a convenient substitute to an interview.

    And if you have any other suggestions of people we should chat with, please do not hesitate to say. Thank you in advance for any assistance you may lend.

    Best wishes,
    Martin McGuinness

    Angel Investor specific questions:
    1. What is the single most valuable element an Angel Investor provides to entrepreneurs?
    2. Would you consider Angel Investors in any way similar to an “incubator” or something different? Why?
    3. Will the current economic climate affect Angel investors and the potential for success of the entrepreneurs they invest in?
    4. What type of companies do you typically invest in, for how much and what is their success/failure rate?

    Angel Investor vs. other options for entrepreneurs
    5. How does an Angel Investor stay involved with their startups?
    6. Apart from the mentorship provided by Y-Combinator/Techstars and the increased control demanded by Angel investors, in your opinion what are the main differences between angel investors and Y-Combinator/Techstars?
    7. Are there any reasons you would recommend to a startup who applies to you to proceed with either Y-Combinator OR Techstars instead?
    8. What is normally the contractual relationship between angel investors and the startups? What would you recommend to the entrepreneurs?
    9. How often do companies receive initial funding from angel investors and then receive additional funding from the same or a different angel investor at a later date?

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