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Ask VC & HN: What was more important than Pandora for 300 VCs?

9 points by diminium ↗ HN
I was reading an article that says Pandora got rejected by 300 VC's. Three Hundred.

I read similar happened with Google and other similar companies. Skype, I heard, had 40 rejections.

I have a mindset that a good idea will reveal itself as a good idea to those who are looking for a good idea. This same mindset is also convinced that a good team will reveal itself to be a good team to those who are looking for a good team. In another way, I believe a good investment will reveal itself as a good investment to those who are looking for a good investment.

Which comes to this question. What was in the mind of all these investors that rejected a good idea, a good team, and a good investment? What were they looking for?

Rejection by a few, I can understand. But rejection reaching in high double digits to even triple digits for a good idea with a good team - I just don't understand. What were they looking for?

7 comments

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il
If it were that easy to identify good ideas/teams then venture capital as an asset class wouldn't have consistently negative returns.

To put it another way: If you think you can identify winning ideas/teams with even 50% accuracy, then drop what you're doing and raise a fund, because you're going to be the most successful investor of all time.

diminium
"To put it another way: If you think you can identify winning ideas/teams with even 50% accuracy, then drop what you're doing and raise a fund, because you're going to be the most successful investor of all time."

Oddly, I think I can but I probably won't be as good as guys like Jeff Dean of Google as a big whale of an example. The principals that Jeff Dean provide aren't rocket science. They are grounded in science, theory, and a bit of art.

If I were in a hiring mood and an unknown guy like Jeff Dean walked up to me and started talking about computing. It would probably take only less than 5 minutes for me to want to hire him. If I brought him to chat next to Anders Heisenberg of Microsoft, I'm sure Anders would want to hire him just as fast if not faster than me.

Now if I brought Anders and Jeff to a typical corporate world (obviously hiding their resume & history), I can see a small disaster occurring. They would probably insult them both and suggest they start at the lower end of the corporate ladder. They probably won't even hire Anders due to his lack of degree. (I still don't understand the corporate mindset as well).

A very good technologist is extremely noticeable (unless they are also a very good actor) once they start talking about technology and how they think about how stuff works together. It's like a giant spotlight shining on you. It's hard to not be blinded.

I don't see a difference a big difference in the investing world vs the technology world. A very good investment should have the same effect but for some reason - people ignore the light.

alid
I'm also surprised by the amount of rejections in your examples! That said there's so many elements that need to come together to get your idea over the line (pitch, team, an idea the VC feels an affinity towards etc). Big ideas are sometimes the craziest ideas, so it's best to embrace that and expect rejection as a natural part of the journey. Here's to the crazy ones!
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tdubbed
Its very possible that many vcs passed because they know how much trouble music licensing is and how expensive it is. Put it this way, Pandora, even though it is one of the best at monetizing advertising especially affiliate advertising, still hasn't turned a profit.

Now you have to realize that the project they pitched with may have been very shaky or just may have been outside the partners expertise

staunch
Don't think that's true of Google. They got $100k from Sun founder (Andy Bechtolsheim) very early.