Three of our worst VC stories
Venture capital’s power dynamics come under scrutiny as founders share both extreme horror stories and quieter examples of integrity, from sexist rejections and pressure to betray co‑founders to VCs who go out of their way to protect founders in nine-figure exits. Commenters note that most funding relationships are mundane and professional, but the outsized impact of a few predatory investors, coupled with the role of luck and networking in extreme wealth, leads some entrepreneurs to favor bootstrapping and niche, profitable businesses over chasing hypergrowth and VC money.
Positive VC Experiences
- Several commenters stress that most VC interactions are “boring”: pitch → polite yes/no → occasional intros and advice.
- Specific positive stories include:
- A board member who discovered an incorporation/stock-plan error during a nearly $1B acquisition and persuaded all investors to give up part of their holdings so the founder wouldn’t lose a huge portion of the payout.
- VCs and firms described as “class acts,” consistently backing founders, being founder‑friendly, and staying engaged for a decade or more.
- An investor who quickly declined a pitch but then spent the remaining time explaining why the idea wasn’t venture‑backable and teaching the founders how VC works.
Common and Extreme VC Misbehavior
- Multiple horror anecdotes:
- A partner allegedly refusing to invest in an early Cloudflare round because he didn’t believe a woman could lead a security infrastructure company.
- A prominent investor advising a founder to push out cofounders and take their equity, seen as a major red flag and “psychopathic.”
- A VC flying founders across the country for a breakfast meeting, refusing to hear a pitch once he learned they had no paying customers yet, and sending them away after a few minutes.
- Angel groups staging humiliating, performative pitch dinners (long waits, awkward presentation format) and then billing founders for their meals.
- Reports of LPs engaging in serious misconduct (including sexual assault) and pressuring CEOs into unethical financial maneuvers.
Wealth, Competence, and Character
- Many argue extreme wealth is only loosely related to competence or intelligence; luck, timing, social signaling, and nepotism are repeatedly mentioned.
- Some see psychopathy or extreme ruthlessness as common among top VCs; others suggest veteran investors become desensitized rather than inherently sociopathic.
VC vs. Bootstrapping and Founder Strategy
- Several participants say stories like these push them toward bootstrapping, especially in a world where AI and small teams can build profitable niche SaaS without outside capital.
- Others note that the “game” of hypergrowth and billion‑dollar outcomes is structurally tied to VC, and that VCs and founders have fundamentally different portfolio vs. singleton incentives.
Other Topics
- Brief discussion of Cloudflare’s success vs. its long‑term unprofitability, leading to mixed views on whether passing early was rational.
- Notes on HN’s preference for linking to canonical sources, a clarification that Monday meetings usually mean partner meetings, and a short tangent about running local AI models on consumer GPUs.