Just to provide a counter example to balance your assessment of VCs: Our lead investor has a Ph.D. in EE from Stanford. Our secondary investor has an engineering degree from MIT and is a serial entrepreneur. They have been very helpful in terms of advice and support.
I made two points, that likely the VCs
could not evaluate my project and likely
only a few VCs could direct an evaluation.
For the first of these two, a
EE Ph.D. very likely would not understand
the crucial, core applied math of my startup
due to not taking the right prerequisite
courses in graduate school. If they studied
from Luenberger at Stanford, then maybe they
would have some of the prerequisites!
For the second,
directing a competent review of my work, a
EE Ph.D.
would likely be able to do that, especially
once I gave them a list of reviewers, and I
did indicate that a few VCs could so direct
a review.
There is a huge problem with VC: Necessarily
they are looking for exceptional cases. So,
what the average deal looks like provides poor
guidance on what a really desirable deal would
look like. And since the VCs are also looking
for things that are new, what the best deals
of the past 10 years looked like also provides
little guidance.
There are ways to know that something really is
exceptional and powerful early on, and the US
DoD has provided a long list of examples for
the past 70 years or so. E.g., the first GPS
was done by the US Navy for the SSBNs, and the
crucial, core work started on the back of an
envelop at the JHU/APL. The planning document
was enough to remove risk, and the rest is
history. Early in my career, I wrote software
in the group that did the software for the
continually updated orbit determination
calculations for that Navy system and heard
the stories about how the system was invented
and pushed forward. It really is possible to
evaluate projects on paper and confirm that
they are powerful and exceptional; results
on paper are how nearly all of research works,
and the work really can be evaluated and seen to
be powerful if it is; but nearly no VCs can
evaluate projects on paper, and maybe their
LPs wouldn't let them fund on that basis
anyway.
So, the VCs are looking for exceptional
projects, and there are ways to create,
present, and evaluate such projects, but
VCs don't do or pay attention to
those things. This situation is so
incredible that it took me a while to
believe it. No wonder their ROI is low.
