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Only a small fraction of the companies that fail actually get acq-hired, and those that do don't always provide a meaningful return to their investors - if they return anything at all. So the notion that you win no matter what (as an entrepreneur) is actually a thing of the past - say from two or three years ago.
And as an investor, especially at seed, you need to understand that losing all your money is the most likely outcome. There is no "safety net" anymore.
2 years, 3 months ago on The Acqui-hire Scourge: Whatever Happened to Failure in Silicon Valley?
@RobinWolaner Hey Robin! In practice we rarely end up investing with individuals we have never met before, and if we see a large allocation (> $100K) we'll tend to probe as to who is behind. Since the whole deal in our business is sustainable dealflow, it would be risky to try and "play" one of us.
A couple of years ago, a firm created a seed vehicle with the cash of the firm's GPs - so as to avoid the signaling issue. That was actually an interesting approach, but six months later, the market knew that it was them - and the signaling issue was back.
2 years, 7 months ago on VCs in Angels’ Clothing: The Sneaky New Trend of “Deal Scouts” in Silicon Valley
As long as it is properly disclosed, I don't have an issue with the practice - it avoids the VC signaling issue (which is real) and you often get more face time and useful involvement with a "free agent".