Hot Girls

It sucks to be a hot girl. Yeah, you heard me, it sucks to be a hot girl.

You might ask, “Carl, what do you know about being a hot girl? And isn’t the title of this post a little edgy?“

Well, let me tell you.

In middle/high school I was not cool. I struggled to fit in and make friends. My freshman year of high school I was friends with a bunch of football / wrestling guys and never felt like I could relate. At the end of my freshman year, they also kind of admitted I was a loser (I think). I would narc on them about smoking weed or saying offensive stuff, and it was getting in the way of talking to girls so they ditched me (stopped hanging out with me, inviting me to things - I felt very abandoned). After that happened I spent the summer after mainly alone - I worked out every day and in the afternoons taught myself computer programming.

The next year I joined rocket club (yes, literally rocket club) and found my home with the nerds. We’d spend nights and weekends in our basement workshop working on 3D printers, programming custom PCBs (parallax), and building model rockets. It was fun, and I loved it even though it made me weird (I wasn’t even a drama club kid, I was a rocket club kid). It gave me a home where I fit in (at least a little bit). Yeah, we were weird, but at least I had friends. There will still cliques, but at least we could spend our time playing kerbal space program and brewing solid-state homemade rocket motors in the kitchen. No one made fun of me there or left me out of things.

In college I was similarly nerdy. I ran hackathons, spent my evenings in the basement of the engineering center or Spark Boulder (iykyk) and just built things. I didn’t like going to parties. My first job out of college was more chill in terms of work life balance but had a similar intensity. I had few friends, but the friends I did have didn’t ask a lot from me and were genuine.

Ok, you might ask again, what does this post have to do with hot girls?

The Hot Girl Phenomenon

A funny thing happens when you start a company and want to raise VC. VC is an asset class like any other, and one of the things that most people don’t know about VC are its power laws. In VC, 95% of the returns will come from 5% of the companies, so about 19/20 companies don’t really matter at all, and those are the ones who raise VC. For most vintages, the numbers are even more extreme with approximately 10-15 companies (yes that’s right companies, not percent) contributing to MOST of the returns of the entire asset class.

Now what’s really interesting is that if you dig into the statistics, a huge number (like 14.5 of those 15 companies) are started by engineers. There are a bunch of companies that start and exit started by non-engineers, but the ones that do EXTREMELY well are started by engineers (and that’s where most of the returns are). The same nerds from rocket club living in the basement soldering PCBs. It’s basically not worth even looking at companies started by non-engineers the way the power law math works out. There aren’t many nerds from rocket club that also want to start companies, so all of a sudden the people who were on the very bottom of the social stack are now the most in demand commodity. Hot girls.

Why engineers? It probably has something to do with that most of starting a high-growth technology company has to do with building technology. It also happens that’s what engineers are trained to do. It’s essentially all you do in the first couple of years. If you want to get really technical, it’s hackers (a subset of engineers) who are best at it - people who are used to throwing together (and away) projects on the weekend. Hard to beat this pattern matching **.

So, now all of a sudden, the nerds are hot girls. Huh. How the table turns.

Why it Sucks to be a Hot Girl

Fake friends. Fake love. Fuck these bitches.

The problem about being a hot girl is that you attract a lot of friends who aren’t really your friends. They want something from you. It could be a lifestyle, money, or to be popular with you. What happens if you attract a lot of people who aren’t genuine and might seem like you have a lot of friends, but really very few people actually like you. It’s tough to trust that anyone likes you and over time it makes you cynical and and eventually mean (or worse cruel).

Being a hot girl is a good way to find yourself around extractive people. Startups are and silicon valley is no different. Everyone wants to be your friend, and it turns out for people (like me) who are used to having very few friends this is a bad thing, because as someone who’s struggled to have a handful of friends, I try to not let those people down (when you have like 5 total friend each is important).

The thing about the hot deals is that they are too good to be true. Most of venture is this way. Just like hot girls that end up dating shitty guys, just because someone is nice to you don’t mean they’ll be a good life partner. You have to make this mistake at least once to get it, and no one will feel bad for you even though it still sucks. Just like most guys in bars picking up girls are assholes, so are most VCs trying to get into the next hot round. Bad deals all around. The problem is that most bad VCs will give you term sheets (or deals) that are worse than most marriage documents on the first meeting. It’s like getting married after the first date - absolutely insane. Most founders don’t know better though so they take the deal anyways, because it’s fun to be a “hot girl” for the first time in your life.

If you find yourself around a “hot“ round as a founder, just be aware of this. A bad VC will do 100x more damage than a slightly lower valuation via calls on weekends, drama, stirring things up with your team and endless distraction.

My fundraising stats are fairly impressive. I think (in my life) I’ve pitched approximately 70+ times across 3 companies. I’ve only ever gotten a grand total of three (3) “no“ answers, and close to 40 of those have offered me money on the spot, several uncapped notes, and for higherrrrrrr I only “pitched“ three investors (as a function of maybe I should meet this famous person irl, not that I wanted money) and one offered me 20m on the spot in the first meeting (well known firm) and I had rough offers from the other two that I didn’t take.

Sucks to be a hot girl. JK. I’m grateful for this track record, but it’s not as good as it seems on the face of it.

It also creates this dynamic where 2% of companies find fundraising incredibly easy, while the rest struggle to scrape together rounds. It’s an extreme of the popular kid effect where a very small number of people have a ton of fake friends and the rest are left to struggle (like me in rocket club).

The thing about fake friends though is that they’re only there when the times are good, and when the going gets tough, they don’t really care (or never did from the start). 11/10 times if someone commits a check over 1m on the first meeting it’s a bad idea, no matter how you know them. I did not understand this on my first company and expected all of my friends to stick around through the good and the bad because that’s who the small number of people who were my friends in the past did. When it got hard, a few did, but a bunch didn’t. I was over-sold on the status and “friendship & loyalty“ and undersold on the things that would have actually made me successful. A mistake I’ve learned and things have gone a lot better for companies after.

The same thing tends to happen around things like cofounders and hiring. People just want the star engineers who ship (because that’s where the money is). It’s natural, but at the same time oversold. Sometimes I just find myself wanting those 5 friends, kerbal space program, and rocket club again. The peace that brings is much worth any status or fame of being a hot company and as it turns out that peace is pretty critical to building great companies.

Appendix

Note: does this mean VCs are bad?

No, the MAJORITY of VCs are at the worst harmless++ :) . They give you money to work on your company and stay out of the way. Treat them well, they’re betting on you in ways most people wont. Some of the best are great advisors and coaches and for me have become true friends. A pretty good barometer to tell if a VC if harmless or bad (almost without fail) is if they have tried to start a company before (even failed). It means they genuinely have spent their career caring about startups. The best ones will come with rave reviews from founders who they’ve invested in (both good and bad outcomes). These people will understand what it’s like to be a founder and will rarely do a lot of the toxic stuff. If your round is less hot, the more likely you are to have good people find you.

For the ones who haven’t started companies (for the ones who have been founders discount this) - the ones to stay away from are when you go on their linkedin and look at bios of the firm and every single person has one of either a JD, MBA, has only worked as a product manager or COS at mid sized co, worked in PE, lists every single investment as a role, “helped with a exited venture backed company of my family or friends“ (but had no equity) or claims in some way one of their founders of a company that didn’t go well is criminal without reporting them to authorities for any actual wrongdoing. Add a 5-10x “bad” point multiplier for Harvard and Stanford professors who have done any of the former but never started companies. Stay the fuck away from those firms at all cost (valuation dependent ofc).