"Sorry, it's not despicable for investors to focus on their investment and not the personal problems of founders."
The question being begged is whether these two things are positively, negatively, or un-correlated. That has a whole lot to do with the logic of making the investment in the first place.
So, setting aside the "despicable" question, is it rational to invest in a startup where the founders have tons of credit card and student load debt, or planning a wedding they can't afford right now, without also putting some money into alleviating that pain? Do crushing financial burdens make founders "hungry," "panicked," or somewhere in between?
Look at startups the way Steve Blank does: as a series of experiments designed to discover and validate a set of product features that will meet a market need and that can be scaled to large numbers.
Now restrict your perspective to the stages of these experiments that A-round investors like Battery or First Round or DFJ concentrate on. In other words, stipulate that we're not talking about firms like YC that invest in 30-50 pairs of individual people they like every year.
What are the assets of these companies?
Yes, the founders are assets.
But so is the total team.
And so, to an even greater extent, are the proprietary results of the customer discovery/validation experiments they've been running.
And so, to an even greater extent than that, are the customers they have managed to close (or more broadly the "market traction" they've achieved) in the course of conducting those experiments.
And so is inventory, so is brand value, so is the core idea, so is the foothold in the market, so is the framework code they've built and the expertise in extended it, and so on.
Against all these assets, what's the real pragmatic cost of replacing the rare founder whose incentives have flipped so totally against the investors that he will drag the company away from the home-run outcome the investors need so he can salvage his personal life?
Now what's the cost of simply not giving a founder bonus money that itself might pose the risk of allowing the founder to disengage, consider a new startup, become obstinate in board meetings, etc?
I don't know, but I can see sane arguments in both directions for not giving VC founders liquidity.
The nice thing about not taking VC this time around: I don't have to give a shit. =)
The question being begged is whether these two things are positively, negatively, or un-correlated. That has a whole lot to do with the logic of making the investment in the first place.
So, setting aside the "despicable" question, is it rational to invest in a startup where the founders have tons of credit card and student load debt, or planning a wedding they can't afford right now, without also putting some money into alleviating that pain? Do crushing financial burdens make founders "hungry," "panicked," or somewhere in between?
I think those are more interesting questions.