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

By: Martin McGuinness

Martin McGuinness — Thu, 04 Nov 2010 20:31:06 +0000

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?

By: Pemo Theodore

Pemo Theodore — Mon, 12 Jul 2010 03:40:32 +0000

Check out video interviews with Randy Komisar, VC, on Business Models http://www.ezebis.com/venture/randy-komisar-business-models/ Includes response to Chris Dixon Gigaom video interview. Randy is an author & venture capitalist with Kleiner Perkins Caufield & Byers. He wrote ‘The Monk & the Riddle’ & ‘Getting to Plan B’. He is the original ‘virtual CEO’ and has a hands on approach with startups with whom he invests.

By: John Di Domenico

John Di Domenico — Tue, 08 Jun 2010 20:21:25 +0000

Great interview. I agree VC's are sheep and mostly know nothing operational but they are not all bad...

By: kim

kim — Wed, 02 Jun 2010 06:34:56 +0000

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.

By: James Watters

James Watters — Mon, 31 May 2010 20:34:02 +0000

There is an interesting tension between the comments about flipping and the comments about the inefficiency that public markets have in doing big new things....

By: Sanjay Maharaj

Sanjay Maharaj — Sun, 30 May 2010 23:28:05 +0000

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.

By: Youssef

Youssef — Sun, 30 May 2010 09:30:23 +0000

Really brillant!

By: Rube Suckerman

Rube Suckerman — Sun, 30 May 2010 00:00:22 +0000

This is so true, and they always demand far more relative to their effort or contribution, every time.

By: Will

Will — Sat, 29 May 2010 22:23:06 +0000

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.

By: Shripriya Mahesh

Shripriya Mahesh — Sat, 29 May 2010 20:26:23 +0000

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.