135. Dispelling Conventional Wisdom in VC, Part 1 | Does Capital Drive Outcomes? (Eric Paley)

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Eric Paley of Founder Collective joins Nick to dispell some conventional wisdom in VC. We address questions including:

  • Dispelling Conventional Wisdom in VCWhat’s the focus at Founder Collective?
  • What are the downsides of heavily funded companies?
  • Overview and Methodology for your study of 71 IPOs: ‘Overdosing on VC: Lessons from 71 IPOs’
  • Conventional VC wisdom says more capital, better outcomes… Eric, what were the results of the study and does more capital lead to bigger exits?
  • Do you think fundraising is a vanity metric?
  • How do you address large overhead and burn rates when the growth objectives or growth vectors for the business change?
  • Why did you base the multiples in the study on current, public market caps vs the market cap at IPO?
  • Raising lots of capital and big exits… Is there causation, correlation, neither?
  • What about acquisitions… does this study omit a significant number of positive outcomes to strategic acquirers?
  • You also found that public performance, post-IPO, was quite different between efficient vs. heavily capitalized business. What were the results here?
  • Was there any blowback or frustration from large investors at later stages?

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