"nuh-uh, it's super hard to get funding".

I never suggested any such thing. But I WAS being critical: PG's description amounted to saying that VCs want to get on the plane only after it has already left the runway. Although I didn't say it, I suspect that, then, what PG is saying is not all that close to how VC funding works. I wasn't being critical about it being "super hard" to get funding but just about the apparent contradiction in what PG wrote.

The VCs can do what they want. As Mark Suster has illustrated with some graphs and data, over the past 10 years the VCs have been doing poorly, and about half the partners are 'unemployed' as VCs.

So, I can't 'look up' to the VCs as business experts. They have MBAs; pseudo-great, I've been an MBA prof. Some VCs have had some startup experience, maybe in 'biz dev'. Pseudo-great; I helped start one of the most successful VC funded companies in history. And as IT experts, I have to look down on nearly all of VCs (although YC is an exception) so far I'd need a Hubble telescope to tell them apart. I've taught computing in two research universities, published peer-reviewed original research in computer science, mathematical statistics, applied mathematics, and artificial intelligence, and helped ship two commercial products from Yorktown Heights.

Any way it goes, I have to build a successful business. So does every entrepreneur on Main Street who opens a pizza shop, auto body shop, grass mowing service, etc.

So, as you wrote, by the time I've built a successful business, say not an "unproven" business, I would be able to sell a fraction to a VC. Okay. Just why I'd want to do that escapes me.

Or, the day before I take a VC check I have a 'proven' business, say, half filling 15 Mbps upload bandwidth with revenue close to $300 K a month and own 100% of it. The day after I take a VC seed check, I have $100 K -- $500 K more cash in the bank, that is, revenue from 1-2 months, where it took me much longer than 2 months to get the seed check, own none of my company, have to get my fraction of 'my' company back on a four year 'vesting' schedule, and can be fired by the Board at any time. Bummer.

My point is not that it's tough to get VC funding. Indeed, I MUST build a successful business, VC funding or bootstrapped. It's plenty clear, from what PG wrote and more, that once I've built a successful business, say, $300 K a month in revenue growing quickly, then I could get a VC check. And PG is saying that much before then, I can't get a VC check. Okay. Thems are the rules. Good to know the rules.

So, what was my point? Just that the rules as PG wrote them don't make much sense. I doubt that what he wrote is very close to the truth.

As an entrepreneur, I have to evaluate the potential of my business early on. Nowhere did PG mention that a VC will review that evaluation. Here he is mostly correct: One could count with shoes on all the VCs in the country who could evaluate or even direct the evaluation of the crucial, core 'secret sauce' in an IT business plan.

People have mentioned a similar point before: If VCs want to wait until there is significant traction growing quickly, now they risk waiting too long. That is, it used to be that, to get the traction, the company needed funding to write the software. Surprise: At least from Microsoft, once one understands the relevant parts of .NET, essentially all the code for a Web site, indeed, for much of commercial software, is already written, and all that's needed it a little, simple glue to join the .NET code.

Next, surprise: If usage grows, then can call up, say, Tiger Direct, get some parts, and plug together one heck of a 64 bit server for less than $1000. We're talking what, 4 AMD cores at 3.0 GHz for $100? A motherboard for $100? Main memory at $10 per GB? 2 TB hard drives for $100 each? A high end Antec power supply for $100? A case for $50? Some fans for $2 or so each? What'd I leave out?

Next, surprise: If usage is significant, just $1 CPM will throw off enough cash to buy servers enough to double capacity in less than two weeks. So, that's exponential growth. Bandwidth used to be really expensive. Surprise: Now where I live $15 Mbps upload with a static IP address costs $65 a month, and CAN use it for a Web site.

Fred Wilson has written on his blog that these changes are good for VCs. Maybe. And I continue to see the major successes taking VC funding and don't have a good list of successful bootstrapped companies.

Still, from what PG wrote, basically I've got to have, say, $300 K a month in revenue, growing quickly, to qualify for a Series A. But, in my case, that's just me and my team, two of whom have four legs, long tails, and long whiskers, and myself and I and a server at my left knee in my living room. For the server, I have one in a box in the next room. I also have an offer of a loan of one with 32 cores and 2 TB of main memory -- that used to be a lot of disk; now it's main memory! BELEIVE me, a 32 core server could send well over 35 pages a second from my Web site software! For the Microsoft software, their BizSpark program will let me, or essentially any IT startup, have the copies of Windows Server and SQL Server for free for a while.

Again, I'm not complaining that getting a VC check is too hard. Indeed, again, I need to build a successful business, say, $300 K a month growing quickly by myself. And, apparently PG would agree that with such a business I could get a VC check. Okay. But why then would I want to take a VC check?

Net, if I can ramp up to $300 K a month in revenue, I won't need a VC check. If I can't, I can't get a VC check. So, either way, there's no VC check. So, my point is, with PGs description, of what use are the VCs? Understand now?