Idea · carried by 1 source
VC Money as Heroin
Venture capital is addictive. Once you start raising, it's extraordinarily difficult to stop — and the hamster wheel of constant fundraising prevents founders from taking the straightest path to their goals.
Where it comes from
William Hockey, explaining why he self-funded Column, in highlights/william-hockey-bet-on-yourself (~20:40): “I sometimes make this joke, maybe not appropriate, but like like VC money's kind of like heroin. Like it feels good. It's amazing. But like you got to keep shooting up. Like it's very challenging to get off.”
How it works
- The addiction cycle: “You raise a hundred million dollars Series A and then they're like, 'I'm done.' It just doesn't happen.” Once on the VC treadmill, you optimize for the next fundraise.
- The windy path: To raise the next round, you chase trends: “Okay, stablecoins are cool this year. Let's do a stablecoin strategy. Okay, AI is cool this year because I need an AI strategy.” Your business takes “a pretty windy way to get there.”
- No long-termism: “The hamster wheel of VC doesn't actually allow us to be long-term.” You're burning at rates requiring raises every 12–18 months.
- The rational behavior trap: What founders do is rational given the system — but “that's not going to be the straightest line to your goal.”
- The factory: “San Francisco is a bit like a factory like is by design and I think it can be quite effective but I think for the ambitious founder I actually don't think it's the right thing.”
The VC model creates rational short-termism. Founders who want to play the long game — making decade-scale investments — need a capital structure that doesn't require another hit every 18 months.