Comment by downandout | Hacker News Reader

Comment by downandout | Hacker News Reader

"Yet suddenly, the startup was the talk of the town when it managed to raise $25 million in seed funding in June 2013 from top investors including Peter Thiel, Andreessen Horowitz, Marc Benioff, Jim Bryer, Accel Ventures and Index Partners."

These guys are all supposed to be amazing predictors of the future. Who really cares whether payment data is transmitted via ultrasound, bluetooth, NFC, or over the wifi/cellular data connection? How does adding ultrasound to the mix shape the future, as all of these guys claim they want to do?

I blame the investors in this case more than Duplan. There are 70 people that wouldn't have been hired and fired if those investors hadn't written this apparently very immature 21 year old kid a $25M check for some hokey technology. Duplan clearly had a knack for communicating a believable grand vision, but little ability to deliver on it. Investors at this level - allegedly some of the most sophisticated VC's on the planet - are supposed to be able to identify people like this.

I'm genuinely curious. Let's say things had turned out slightly different, he'd been able to negotiate the deals with the banks that he needed (let's say he had a Board Member who helped open a few doors, or perhaps a Sr. Executive who had deep experience with the banking industry/regulations, and could expedite) - and let's say that clinkle had taken off, and was generated sufficient revenue to be a $10B company. Would you still blame the investors, or would you be impressed by their willingness to take risk?

From the New Yorker article on Marc:

Each year, three thousand startups approach a16z with a “warm intro” from someone the firm knows. A16z invests in fifteen. Of those, at least ten will fold, three or four will prosper, and one might soar to be worth more than a billion dollars—a “unicorn,” in the local parlance. With great luck, once a decade that unicorn will become a Google or a Facebook and return the V.C.’s money a thousand times over: the storied 1,000x.

A16Z invests in 15 companies/year, knowing ahead of time that ten of them will fold. Being able to predict the future is hard.

A16Z invests in a lot more then 15 companies/year, that article is way off in that regard

here is a tweet from dec 2014 where Chris Dixon (General Partner) said they did 30 seed deals last year adding up A, B, C, etc. they do closer to 50-100

https://twitter.com/cdixon/status/544570097465954304

crunchbase shows they have done 31 publicly known ones in 2015 so far

https://www.crunchbase.com/organization/andreessen-horowitz/...

My point was that the odds of this particular individual pulling it off were near zero to start with. Calculated risks are fine. This "risk" had essentially no chance of success, both because the concept was not compelling, and because the founder was incredibly immature and had zero experience.

For comparison - the odds were probably against Uber succeeding, but it had a compelling value proposition for its customers: with a few taps, you can summon transportation anywhere. What was the value proposition that Clinkle offered? There really wasn't one that I can see. NFC already existed when they came out, and users weren't going to care which technology actually transmitted their data. Uber was a calculated risk; Clinkle was just a blunder of an investment. It wasn't even a gamble; the term "gamble" implies that you have a chance of winning.

We don't know who invested how much.

At least a few years ago you could get ~$50k in seed funding from a16z really easily (just needed to seem promising, without needing to meet the general partners, etc.). It has probably changed now that a16z has shifted more towards the larger, later rounds. VCs do these deals because it costs them nothing and they now have their foot in the door for later rounds.

Entrepreneurs love these too, cause they can bandy about these big names. I wouldn't read too much into the big-shot names unless there's a $$ figure attached.

> At least a few years ago you could get ~$50k in seed funding from a16z really easily (just needed to seem promising, without needing to meet the general partners, etc.)

Nope, both Marc Andreessen and Ben Horowitz actually came to Duplan's office and had a long meeting with him. Marc and Ben agreed to invest in him after the meeting, likewise Peter Thiel invested after having a meeting.

Thanks for clearing that up. For the record, I didn't say that was what happened to Clinkle, only that a16z does (or at least used to) make many small spread-your-bets seed investments.

Many of the same investors put money in uBeam... Whatever due diligence they are doing, it's not working...

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