Last Week on VC Twitter — Week of August 19th 2019

VCs really should have expected the higher prices for YC companies when Demo Day moved to SF

It’s every early stage VC’s favorite week of the year: Demo Day week! Personally, I can’t wait for all of the incredulous tweets about the valuations that YC companies are looking for.

At the the bottom of this edition of Last Week on VC Twitter, we find out if VCs and founders think “relationship building” matters.

📊 S-1s for WeWork and Cloudflare released

Big winners for WeWork: Softbank, Benchmark, Adam Neumann

Big winners for Cloudflare: Fidelity, NEA, Venrock, and Pelion Ventures (a Salt Lake City based firm)

😡 Toptal founder outed for blocking VCs and employees from actually getting equity

If he had not prevented employees from gaining equity, I would have admired the move. Sure his reputation among VCs is burned, but if things go well, he’ll never need them again. VCs are sophisticated counter-parties and knew what they were getting into when they signed the notes. If they don’t like it, they can ask for the principal (and interest accrued) to be paid back.

Employees on the other hand, aren’t sophisticated counter parties and often find themselves getting the short end of the stick (see this thread about an early WeWork employee and not getting equity)

💸 Softbank loans $20B to Vision Fund employees to invest in Fund II

$10B of which will be given to Masa. Say what you want but he is a man comfortable with risk. This ups Softbank’s total downside exposure in Vision Fund II to $58B.

📆 Demo Day & Burning Man prep

160+ companies in this batch. Three Days of Pitch Madness (Alumni Demo Day was today).

Thread of the week:

🤝 Do VC Relationships Matter?