Usually, the problem is the opposite. A 30MM acquisition is a limping outcome for a VC. Usually, the problem is that the team wants to sell, so that equity will be worth something, and VC wants the company to shoot the moon, because a 1.5x outcome doesn't move the dials, and the model is that the 10x's pay for the 0x's.

There's not a lot you can do as an employee about mismanagement that results in crappy outcomes. But it's an orthogonal concern to how equity is allocated. The commenter upthread was right when they said: part of your job as an employee is to pick the right company to work for.

That's the theoretical view of the VCs that they propagandize and that is accepted pretty widely.

The reality is, VCs are herd animals, and when the herd is spooked they make a lot of stupid decisions.

I've seen this more than once-- a later company was forced to sell for $10M, by the VCs, during another "oh the money spigot might be turning off!"

It is not an orthogonal concern-- how was I to know the VCs were going to screw us over? The return would have been dramatically better if that hadn't happened.

So the lesson learned is-- the right company to work for is one where the founders either don't take VC money or are very distrustful of VCs and only take it on favorable terms.

Once again, these aren't so much opinions as they are mathematical facts. The modal outcome for a portfolio of startup A rounds is a 0% return on investment. If fully half the companies in a portfolio exit in the money --- which seems wildly optimistic --- and their average return is 150%, the portfolio loses money.

Nobody is entitled to venture capital. Plenty of people start companies without it.

Yep, but I couldn't care less about the portfolio, and the founders shouldn't either. You're pointing out why VCs need big exits, and even a profitable one like this one may not be profitable "enough", but that "enough" is their portfolio view.

From a founder view, we shouldn't be carrying the weight of the effective cost of the fact that the VCs can't pick companies worth a damn and want to make it up on us, if we happen to be good.

Nobody is entitled to venture capital, and starting a company without it is a good idea.

And VCs are not entitled to more equity & control than makes economic sense for the founders. That's what I'm opposing, but I don't think you disagree.

You very much do care about the economics of VC if you need their money to build your company. No professional investor will give you terms that will lead to them losing money; that's irrational.

People don't sell equity to VCs because they've been snake-charmed by them. They do it because if you need 2MM+ for your company, they're the only realistic option. Ever talk to a bank about a line of credit against receivables? That's a fun conversation.

You should care about the portfolio, because that's the model VCs have used to decide to invest in your company.