VCs no longer value a founding team’s background as much as profitability, and that could be yet another blow to waning founder-friendly terms in Silicon Valley
The coronavirus-led economic decline is shaking up the hierarchies of Silicon Valley’s entrepreneurship class.
Prior to the slowdown, Silicon Valley gave a home-court advantage to various influential “families” made up of the early employees at major tech companies, or the alums of startup unicorns, who have since left to try their own hands at investing or entrepreneurship. There’s the Airbnb network, and the veterans of Uber, and famed accelerator Y Combinator has a network of its own. Twitter, Google, and Facebook all have their respective groups. And, of course, there’s the PayPal diaspora that spawned Palantir founder and venture capitalist Peter Thiel, Tesla founder Elon Musk, Max Levchin, LinkedIn founder Reid Hoffman, and roughly a dozen others still active in the tight Silicon Valley ecosystem.
In the recent past, having any one of those family names on a resume raised the chance of scoring a respectable amount of venture funding early on in a startup company’s life cycle, sometimes before the concept or technology itself had been proven out.
Over the last 6 months, however, a founders’ pedigree has fallen out of favor among major venture capital investors as a predictor of company success. In …continued .
[Source: Business Insider]