<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>FailMore</author><text>I was a VC. I think it is mainly that it is a very weak signal. A good VC or a select group of high quality angels does help a company get itself in order, so raising money from a large collection of distant angels tends to be a signal that the quality of the company must be low - as they &lt;i&gt;should&lt;/i&gt; have tried to raise from high quality individuals first.&lt;p&gt;A company with crowdfunding will have to display stronger metrics than a company with strong angels &amp;#x2F; VCs.&lt;p&gt;Imagine two companies come to pitch, both are identical in every way. One has crowdfunded a $1M seed, the other got a check from Andreessen Horowitz and the CTO of LinkedIn. Which one do you put your money in? Even the potential deal flow from those individuals helps hedge your bet.&lt;p&gt;As a side note I think that this relationship of quality and crowdfunding is true (though not always by any means). I have seen fraudulent behaviour by companies misrepresenting their data to a group who are, by a VC&amp;#x27;s standard, very unsavvy investors. This company was certainly not able to raise money from a VC, but raised two $M+ rounds on a crowd funding site. However, I have also seen good companies who don&amp;#x27;t have an &amp;#x27;in&amp;#x27; to the VC world raise money in this way.</text><parent_chain><item><author>seibelj</author><text>This is anecdotal, but I chatted with a VC for a while at an event and he said their firm will not invest in anyone who did equity crowd funding, on the theory that it signals a weaker company. If they were stronger, they would have raised proper VC.&lt;p&gt;I think the existing VC investment structures hate the idea of crowdfunded VC as it threatens their model, which is personal connections and an old boys (and girls) network which allows more favorable terms for investors, especially for first-time founders.&lt;p&gt;I hope that crowdfunding becomes more normal. Not every idea has to have billion dollar potential, which is what most VC&amp;#x27;s are looking for.</text></item></parent_chain></comment><story><title>U.S. Startups Fail to Attract Expected Crowd of Small Investors</title><url>https://www.bloomberg.com/news/articles/2017-05-19/u-s-startups-fail-to-attract-expected-crowd-of-small-investors</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>riazrizvi</author><text>Even as a founder I can understand why VCs might be reluctant. Investors accumulate control of a company over each round of funding. This enables them to rest easier that their money isn&amp;#x27;t going to be mismanaged. The investor-bloc&amp;#x27;s influence is predicated on the reasonableness of the other investor partners, if they don&amp;#x27;t see eye to eye then their votes don&amp;#x27;t have influence. An equity crowd is not a strong partner for the investors. Just the opposite it leaves more control in the hands of the executives because they have the direct communication channel to them.</text><parent_chain><item><author>seibelj</author><text>This is anecdotal, but I chatted with a VC for a while at an event and he said their firm will not invest in anyone who did equity crowd funding, on the theory that it signals a weaker company. If they were stronger, they would have raised proper VC.&lt;p&gt;I think the existing VC investment structures hate the idea of crowdfunded VC as it threatens their model, which is personal connections and an old boys (and girls) network which allows more favorable terms for investors, especially for first-time founders.&lt;p&gt;I hope that crowdfunding becomes more normal. Not every idea has to have billion dollar potential, which is what most VC&amp;#x27;s are looking for.</text></item></parent_chain></comment><story><title>U.S. Startups Fail to Attract Expected Crowd of Small Investors</title><url>https://www.bloomberg.com/news/articles/2017-05-19/u-s-startups-fail-to-attract-expected-crowd-of-small-investors</url></story>