Jacques Mattheij

Technology, Coding and Business

To Stay Or Not To Stay

It must have seemed like a good idea at the time. Facing a sizable fraction of his own party that wanted to secede from the EU David Cameron made the gambit of the century: Let’s have a referendum and get this behind us once and for all. He never for one second thought that the ‘leave’ faction would be able to win that referendum and the end result would be to cement his own position for at least another election cycle to come. Alas, for everybody involved, we now know this was an extremely costly mistake.

Amidst claims of regret and being duped the UK population is rocked by the impact of what they’ve done, but even if everybody that wanted to would be allowed to ‘switch sides’ and vote again the ‘leave’ camp would still win, but by a smaller margin.

There are a number of driving forces behind the ‘brexit’ vote, and as I watched the whole thing unfold from my (Dutch, and so EU) vantage point I tried to make a small catalog of them without assigning them any relative weights.

  • The EU government is spectacularly out of touch with its subjects and does a very poor job of communicating the pluses and the minuses of being part of the union. As one of those subjects, and fairly politically informed, it always amazes me how opaque ‘Brussels’ is to those that would like to know how it all functions and what options we as ordinary citizens have to influence the proceedings outside of the votes we cast. There are veritable mountains of documents about the EU, but there is no relatively accessible piece of information that gives a person with average education an idea of how it all works and what the tools at hand are. The EU is generally viewed as a cost without upside (and the main upside is that the EU is much more stable than the countries that it unites), a net negative and a draw rather than a benefit. The fact that Brussels diplomats routinely take compensation without any performance whatsoever and that corruption is perceived as being wide-spread doesn’t help either. In general, EU politics are far away from the voters boots on the ground. This is as much a real problem as one of communications and can’t be solved easily.

  • The UK, a former world power, has seen its position marginalized further and further over the last 5 decades. An older generation hankers back to the days long gone and would like to see Great Britain to be restored to its former glory. This is understandable, but in my opinion somewhat mis-informed. The world is a much more connected place today than it was 50 years ago and next to a unified EU with the UK as an outsider (and, if we are to believe the latest developments with England as an outsider) it is not a very important country economically. The EU is a very large economic entity and to negotiate with 27 countries individually the UK of the past had formidable clout but today the situation has changed very much and turning back the clock like this simply isn’t going to work.

  • Immigration, always a hot topic when things are not going well. The UK has its share of immigration issues, just like the rest of Europe. Unlike most of the rest of Europe, as an island there is the illusion that the physical borders are insulation against the issues that the rest of Europe struggles with as soon as the subject is the free movement of people. Right or wrong, it doesn’t matter, there are a lot of people in the UK that feel that ‘the foreigners took their jobs’, or that refugees are the kind of people that there simply isn’t room for. It’s a tough problem, but I highly doubt that this problem is large enough to isolate a country over from its main trade partners. On the one hand, there definitely is some truth to the downward pressure on wages from cheap competition (so when this affects you directly your vote for ‘exit’ is probably in the bag), on the other, a large influx of people that are most likely not going to be net contributors to the economy isn’t going to help either. But, and this is the bigger issue, exiting the EU will come with the requirement to re-negotiate a whole pile of treaties and the EU is most likely simply going to make all the same things that were tough to swallow pills in the past bargaining chips. And this time the UK (or what’s left of it) will not be in a position to refuse much of anything. So I highly doubt that this subject will be resolved through an exit of the UK from the EU.

  • Automation: Unlike immigrants vying for the jobs traditionally held by UK born blue collar workers (many of them second generation immigrants themselves) the automation wave of the last 30 years has done as much or more to damage the prospects of those that do not have a high level of education, and those that do not work in the immediate vicinity of a large population center. More and more jobs disappear through automation in almost every branch of industry. This has led to record un-employment and governments the world over (including the UK) are struggling with how to deal with this. For a laid off factory or agricultural worker it does not matter what the underlying reason for being jobless is, the frustration with the establishment to whom they would look to solve this is definitely understandable.

  • General protest votes against those in power seem to me to make up the remainder of the group that voted for the exit, and quite a few of those are now in the un-enviable position of having received what they wished for, a country whose leadership has already started infighting and which - to me as an outsider at least - appears to be utterly rudderless, which for a former seafaring giant is a very bad position to be in.

If the UK were a boat, it would appear as if the captain had descended into the hold with an axe and had made a giant hole in the bottom of the boat to prove that it can’t be sunk. Fortunately the UK is an island and literally sinking it is an impossibility, but the damage done dwarfs anything I’ve seen a political entity ever do to their own country.

The really puzzling thing about the composition of the ‘leave’ voters is that a very large number of them stand to be positioned squarly in the way of the blow that will land on the UK economy once the exit is a fact. I can see ‘change for change’s sake’ as an option but when it is all but a certainty that your own position will come out much worse it makes me wonder if the consequences have been thought through.

Junker & co are happy to finally kick the naughty kid out of the class, and even though I understand their position I’d like to caution them not to be too rash, it’s just another example of the EU doing what it does best: to decide without any visible kind of proces behind the decision, and I don’t recall voting for Juncker. For one a very large chunk of the UK voted ‘remain’ and to push the UK to exit too fast could very well alienate this extremely important faction within the UK, for another, it would appear that France and Germany would like to see the UK cut up into pieces or to no longer be a factor of note in EU politics so they can drive their plans forward unimpeded.

The damage is done, I for one would very much like to see restraint on the part of the EU leadership on how they deal with the self-inflicted crisis in the UK and to limit the damage where possible. If the UK loses some of its special status then that would be acceptable, but to push the UK out when it may be possible to retain it - or a large fraction of it - through some kind of compromise would be a mistake worthy of a Cameron, and we already know how that ended.

Pinched Nerve Due To Desk

About a week ago I bought a really nice solid wooden table for a song in a second hand store. Hauling it home was quite the job, the thing weighs a ton. Fortunately the legs came off otherwise I’d still be standing in front of the staircase with it. After two days of working I noticed that the pinky and ring finger on my left hand felt numb and wouldn’t move the way they normally do. This is worrisome, my ability to type is part of my bread and butter and when it got worse the next day I figured I should do something about it.

Numbness usually indicates something is not ok with the nervous system so I started googling for what it could be and after a while I found this wikipedia article on Ulnar Nerve Entrapment. Which pretty much matched all my symptoms. And so I ended up suspecting that my nice shiny old-but-new-for-me table may be the culprit.

And it turns out this is the case! Because of the height of the table the angle at which my arms rest against it is a little bit different than what I’m used to, which causes the weight of my arms to rest partially on my wrists. That’s pretty normal, but instead of resting on a surface they now rest against the edge of the table. It doesn’t feel unpleasant so I was’t worried about it at all but it just so happens that right at that spot the nerve passes relatively unprotected and this mild pressure is enough to pinch the nerve.

So, heighten the chair and the symptoms are already getting less. What surprises me is that I never had any of this before and the speed with which it got worse. Let’s hope the recovery will be complete and that it will continue at the same speed. So, if you have a numbness in your pinky and index finger better check the height of your table or, if you are a cyclist, how your arms rest against the handlebars if you have those fancy curved ones.

YCs Basic Income Experiment

Ycombinator has decided to move forward on their ‘Basic Income’ experiment. That’s a pretty bold step and I absoltely commend them on doing this, experiments like this are a lot more valuable than hot air.

The one thing I really don’t get is why they start off with time-limiting it. If the outcome of a basic income experiment is going to be used then it had better be as realistic as possible. And right from the get-go this is something that is not even close to the way it will be in reality.

The previous YC article on the subject contains this passage:

Our idea is to give a basic income to a group of people in the US 
for a 5 year period, though we’re flexible on that and all aspects 
of the project—we are far from experts on this kind of research

And the new one says:

We want to run a large, long-term study to answer a few key 
questions: how people’s happiness, well-being, and financial 
health are affected by basic income, as well as how people 
might spend their time.

But before we do that, we’re going to start with a short-term 
pilot in Oakland. Our goal will be to prepare for the 
longer-term study by working on our methods--how to pay people,
 how to collect data, how to randomly choose a sample, etc.

So, if I read it correctly then the pilot will be really short and the ‘long term’ study will be 5 years.

But if Basic Income is to succeed in any way and if this experiment is to validate the concept then it should support a number of people for the rest of their lives. Because otherwise they will behave totally different compared to giving them some money for the next 5 years. It’s one thing to make someone dependent on you and to observe their reactions, it’s quite another to cut them off after 5 years as if they are lab animals at the end of a medical experiment.

Ethical design of experiments involving real people with all the potential impact this will have on their lives is going to be tricky. Move fast and break stuff is fine for web-apps but when you start messing with people’s lives directly you need to be very very careful.

The Problem With Electric Vehicles

Electric Vehicles (EVs) are all the rage these days. They’re wicked fast off the mark, they are nearly silent at low speeds and they are perceived as ‘green’, what better way to make yourself feel good than to get an Electric Vehicle as your next car.

Now, as much as I like ‘greentech’ I see a whole pile of issues with EVs that won’t be easily wiped off the table using appeals to emotion (such as acceleration speed of ‘fun’ of driving) or a (somewhat misplaced) sense of improving the environment.

First of all, if you really want to improve the environment the best way to do so is to not buy any vehicle at all. Every car, electrical or not, even when it is never used is an enormous expenditure in both energy (and therefore greenhouse gas emissions) and raw materials simply because it has to be manufactured. So if you want to do the best possible thing for the environment cutting down on your traveling and working hard to avoid the purchase of a vehicle are the two best things that you could do when it comes to transportation.

But fine, you need a car, for whatever (presumably valid) reasons. I’m trying to imagine a world where all cars are electric and what kind of impact this would have on the way transportation is arranged right now in the world as we know it.

Some Background

For starters, lots of the infrastructure that we use to power our current transportation needs comes in the form of the global movement of various fractions of Petroleum, which is rather messy (it’s a liquid, and spills are not rare at all and the environmental impact of removing it from the Earth’s crust is huge) and impractical compared to say transporting energy through wires. The bad news (the messiness, the environmental damage and the fact that this requires the physical movement of vast amounts of material) is somewhat balanced by the good news: it can be stored for a long time without degradation if stabilized properly, it can be carried around to places where no other infrastructure besides roads exists, the energy density of the end-products as used in transportation (mostly: gasoline, diesel and liquified petroleum gas or LPG for short) is very high compared to existing battery technology.

In a world where all the cars and trucks are electric you’re going to have to roughly supply your average highway with infrastructure comparable to the energy consumption of the cars on that highway (or the cities around it). So a massive shift from one form of energy carrier (everything based on petroleum that ends up in the transportation sector) to electrical energy (which will require not only generating capacity in the form of nuclear, fossil fuels or renewables, but also the infrastructure to transport it) would be required. This translates into a massive increase in the carrying capacity of the power grid compared to where we are today. To give a rough estimate, according to this page the energy consumption of the United States transportation sector (which will not be typical for the world as a whole but it gives an indication) is approximately 28%. The vast majority of that comes on account of Petroleum based consumption, but of course it will also already include those EVs that have already been deployed. Regular ICE’s are terribly inefficient, as low as 18 to 20% on average. On paper, EVs do much better than this but in practice that advantage is somewhat dimished. There are for instance the charging losses to contend with, around 20% or so. Electric motors (the prime mover in an EV) are much better than ICEs in converting energy to motive power at 80% or better, so less energy would be required from the charger to the vehicle to achieve a similar distance traveled. But because it is the total system efficiency including generating losses at the power plant and transportation losses in the grid in the end that theoretical 80% ends up being much lower (if the power source at the generating plant is a gas turbine for instance the efficiency of the generator is in the very best case 60% but more realistic would be about 50% and further losses in the grid would be another 6.5% or thereabouts. Total system efficiency would then be .5 x .8 x .935 x .8 or roughly 29%. Still much better than the ICEs this all replaced but not quite as good as it looked initially. So 68% (20 (ICE) / 29 (EV)) of that original 28%, or 20% extra energy would have to be generated by the utilities and transported through the grid to the charging stations in order to accommodate all transportation to be electric.

The problems

Problem 1: Transportation will load the grid and generating capacity in rather nasty ways

Our current infrastructure has been created with several large factors driving it: industrial use tends to create a fairly steady baseline because companies have been given incentives to use electricity steadily (so in continuous processes) and at night rather than in irregular patterns during the day, household and office use adds a an element of larger variation but is a relatively small fraction of total energy use. The major generating capacity in most countries is provided by natural gas or coal burning plants and nuclear power plants. Load Following describes the process with which a power plant can increase or decrease its output power responding to increases in demand. If everybody starts charging their EVs this will cause the grid and generating capacity to be very heavily loaded during times when domestic power consumption is traditionally rather low, and in places where such quantities of power are not currently available. Your average town does not have the power infrastructure to deal with an extra draw of a whole bunch of commuters arriving home roughly around the same time (say, between 5:30 and 7 pm) and all of them plugging their cars in to recharge. The maximum power draw when recharging batteries is right at the beginning of the charge cycle and this will compress a whole pile of consumption into a relatively small amount of time.

Problem 2: Rapid charging is actually not so rapid, highway re-charging stations will have to be much larger than current gas stations

Because re-fueling using gasoline or diesel is incredibly rapid (typically: < 5 minutes from start to finish to get a full tank including payment) gas stations tend to be relatively compact. A typical gas station on the highway can have anywhere from 6 to 14 pumps and will process a hundred cars per hour or more without a problem. If the time to ‘refuel’ increases to an hour or so then you’d need much more space in order to allow all the vehicles to be on-site for that whole time, and you’d have to keep those people busy for that time as well. Personally I would not care for any extra delay during my travels, being forced to wait while my car recharges is not something that appeals to me, and I assume that people that are underway usually want to get to their destination rather than to be forced to take hour long breaks in order to get their vehicles ready for the next leg.

Problem 3: Gas stations are not generally in the neighbourhood of electricity generation stations.

The fuel that a fuel delivery truck burns and all the other energy expended to get a certain quantity of fuel delivered to a gas station is similar in nature to the losses in powerlines to charge EVs. They’re called ‘transportation losses’. These are for the grid as a whole at a rather acceptable 6.5%. But if we’re going to draw power in very large quantities (a few hundred super chargers in the same number of locations that we currently have gas stations at) those losses will likely go up due to the increased average distance between consumers and producers, making the total system efficiency of EV’s worse they would seem to be today. Also, even if this is deemed to be an acceptable solution we’d have to still make that power available, which will require fairly massive investments in infrastructure in order to accommodate the power draw. Every highway would be more or less automatically accompanied by a bunch of power infrastructure, not unlike the trolleybus systems, but with higher voltages and using periodic re-charging of batteries rather than a continuous contact between the vehicle and the power infrastructure (note that the Trolleybus system is rather clever and side-steps the charging loss issue). Of course we have lots of experience with building power grids and this is definitely something that could be done but it will require time to build it.

Problem 4: Re-charging will not work nearly as well when vehicle utilization goes up due to sharing

A typical family car will be parked in excess of 95% of the time, which leaves ample opportunity in an ‘ownership’ situation for re-charging. But as vehicle ownership shifts to sharing a vehicle between multiple users during the day vehicle utilization will increase (which is a good thing!), but opportunities to re-charge will be reduced and per-vehicle consumption of energy will increase. Overall there will be fewer vehicles but the number of passenger kilometers (or miles, if you wish) will be roughly the same, or might even go up when coupled with such emerging technologies as self-driving cars. So there will be substantially less opportunity for re-charging between rides.

Problem 5: We don’t actually have all this infrastructure yet

If a substantial chunk of our energy consumption due to transportation needs is going to shift from being directly petroleum based to being mostly based on the timely delivery of electrons in vast quantities and to a very large number of locations then we will have to invest massively in both generating capacity and grid capacity. In all the EV articles I read this fact seems to be wiped off the table as a footnote or it isn’t even mentioned at all. The shift from hydrocarbons to electrons for transportation will take many years of planning and building to accommodate, and even if EVs are ‘hot’ right now the total number of EVs sold is still relatively low (exceptions: Norway and the Netherlands). Now, NL is a really small country (about 100 x 200 km), so things like range due to limited battery capacity and cost of grid infrastructure are fairly low impact here, and in Norway they have vast amounts of hydropower, which explains some of why these two countries are ahead of the pack. In other countries that are not so fortunate it will take a substantial investment in power generating capacity and in grid infrastructure in order to make large scale deployment of EVs a reality.

Problem 6: Range

In small countries and around cities range is not really an issue. But with trucking and things like holiday trips and other longer distance travel a lack of range can become a real issue. A typical EV on the market today has a range of a few 100 miles at best and a re-charge time that is not compatible with charging-while-traveling. Gasoline storage density, universal availability and the speed in terms of extra range per minute of recharging/refueling translates into a massive convenience advantage for ICEs which EVs with present-day technology simply can not match.

Problem 7: Trailers

A very large number of the cars out there have trailer hooks, they’ll tow anything from trash to the local dump to other vehicles, horses, boats, caravans and so on. EVs as a rule are not set up for this kind of use and adding a trailer to an EV will dramatically impact the range (which is usually not exactly super to begin with). To compete successfully on all fronts with ICE based vehicles trailer hitches would have to be a factory option for EVs and adding one should not void your warranty or cause you to be operating your vehicle in an illegal manner. For now if having a trailer behind your car is a must you’ll have to be very careful when selecting one because chances that this is an option are slim.

Problem 8: Service

ICEs are relatively well understood but they’re finicky to maintain. Servicing an EV is in principle a lot simpler than servicing an ICE based vehicle simply because the systems are inherently less repairable so the accent will be on replacing modules rather than repairing them. A typical EV uses a DC circuit at a few 100 volts driving an inverter which in turn passes multi-phase power to the electric motor. Such a circuit, while in principle repairable is well outside the range of capabilities your average garage has, but it can be easy to troubleshoot the source of the problem (battery, power electronics, motor or wiring) and replacing the broken module with a refurbished one is something that a competent mechanic should be able to do. This does require a willingness of the manufacturers to open up their service channels, with the failure rate of some EV powertrains it is not at all imaginary that your EV could fail in a location where the brand of your choice has no representation.

Problem 9: Tax Breaks

In quite a few countries the owners of EVs get significant tax breaks, either when purchasing the car or during the lifetime of the car in the form of reduced ownership taxes. This is a good way to stimulate a shift and to get a larger pool of ‘early adopters’ but in the longer term this system will not survive. The reason for this is quite simple: governments will make any such measures income neutral for themselves and as the balance shifts from ICEs to EVs the EVs will have to carry a proportionally larger chunk of the tax burden. With some luck by then the economies of scale will have brought down the cost of batteries and EVs in general so that there will still be an economic incentive to switch to electrical.

Some Possible solutions

Not all of these problems have timely or easy solutions, some of the (especially the infrastructure and power generation issues) will likely take decades to fix, so I don’t see the world switch to EVs in massive quantities in the next few years, I think the change over will be very gradual with technological innovations driving each successive cycle of adoption (battery tech improvements would be one major driver of adoption).

One stop-gap hybrid solution for a number of these issues would be a gas station that has a small power generation station powered by diesel fuel. This would be an intermediate step where an absence of infrastructure would be overcome but it will likely lead to higher prices-per-charge than could be obtained through larger scale initiatives. Still, better some charge than none at all. An even smaller scale solution could come in the form of a ‘range extender trailer’ delivering power to the vehicle from a self contained unit which would be not much more than a fuel tank, an ICE and a small generator on two wheels attached to the trailer hitch of the car, however the above note on trailers applies to such a solution. It may also be interpreted as a way around certain tax rules that give the owners of EVs an advantage, if you then add a range-extender to your car you’ve just re-created a hybrid electric vehicle, which may be subject to completely different taxation.

In the longer term the infrastructure will catch up with the demand that all-out electrical transportation would create, battery technology is hopefully not yet at the end of its development and charge times may be further reduced. If EVs would break 800 km range in production vehicles at affordable prices all re-charging could be done overnight and a large part of the range-anxiety problem would simply go away. Taxi services, commuting, local transport and so on are all excellent use cases for EVs today, and going electric for those situations probably makes more sense than doing this with ICEs. Going longer distances a hybrid is right now probably the best you can do and it will be a while before EVs will be able to compete across the board with ICE’s. You’ll know when we have achieved parity because gas stations will start closing, or will replace pumps with EV super charging stations en-masse.

Another possible solution to some of the issues related to mass charging of vehicles would be that you set a timer to tell the car how long it has to charge, this could then be used to randomize the start-time of the charge cycle so that there won’t be a ‘thundering herd’ problem causing overload of the grid by starting the charge cycle of a large number of vehicles within a relatively short amount of time. This would also increase the ability of utilities to adapt their capacity to the demand because it would come on rather slower.

The Myth Of The Evil VC

If there is one story of a persistant nature that seems to pervade the start-up world it is that VCs as a rule are evil, they’re out to get you, will drag you down to their level and then beat you with experience. Some people that are very visible in the start-up world are perpetrating this to the point of being irresponsible. In Three Roads To The Top Of The Mountain I’ve already pointed out that dealing with VCs is a choice, and that that choice comes with both advantages and disadvantages. The advantages are mostly visible in the short term, the disadvantages tend to only become visible in the long term, especially for companies that end up not being winners after all (and this is the vast majority of them, so chances are that your company too will be one of these).

I’m sure that ‘Evil VCs’ actually do exist, and just in case you weren’t aware of it yet, they pay for my day-to-day living so you can take this as anecdata from someone who is in the pay of ‘the enemy’, alternatively, you could take this as information from someone who has been very close to the fire in a number of deals that few people will be able to match, and in those deals even though I work for the capital side I try very hard to keep an even keel. Having been a ‘founder’ myself this comes naturally to me, it is in fact much easier for me to connect with the world of the founders than with the world of the VCs.

Now, with that out of the way, let’s have a look at how this Evil VC story came to be in the first place. There have been a number of fairly high profile cases where founders were pushed out by the providers of capital. I’m not going to go into the details of who was right in those cases, I’m not even sure that’s interesting. But what I did get from those stories is one fairly universal element: the founders chose - for whatever reason - to give up control at some point. They decided that to have a small piece of a larger pie was preferable to having a large piece of a smaller pie, and in making that decision technically placed themselves at the mercy of their new shareholders when it came to the future direction of the company. One common theme is that a combination of conditions cause a company to need more capital than they initially planned causing the founders to end up with the difficult choice of shutting down or giving up control. Continuing on terms that are not favorable to the founders then gives the company a new lease on life.

That can be a winning strategy, but it sets the stage for being side-lined if the company does badly at some point in the future. Like every other deal that you enter into ‘regret’ is usually not a valid option for annulling a contractual agreement and this is where VCs have the upper hand to some extent. They tend to have done more deals than founders, they tend to have a lot more experience in writing contracts in such a way that those pesky little ‘small print’ clauses work out in their favor should the future not go as planned. You may call that evil if you want, but I think they are simply good at looking out for #1, and as the providers of substantial amounts of money they would be remiss in their obligations towards their partners and limited partners (who in turn provide them with capital) if they did not do this.

Opposite of the ‘Evil VC’ (which again, I’m sure exists) is ‘the evil founder’. The founder that figures that getting funded is a success in and of itself, the founder who will screw over their co-founder, who will risk the business for short term personal gain and so on. This person, like the Evil VC again is mythical to the extent that I’ve never actually met a founder that had any of these ideas when they started out with their venture. But aspects of that do surface with some regularity, and it is against these aspects that VCs try to arm themselves when they show up with their army of legal professionals and domain experts in tow just after they’ve signed the terms sheet. They are not assuming you - the founder - will do any of the above but just in case they have built in a whole slew of provisions into their contracts that will take care of those things and more if and when the situation occurs. And given that they, rather than you, have drawn up the contracts in the first place (the usual state of affairs) they already have an advantage here. But it need not be that way.

The thing to remember is that there are two sides to the table, not just one and at that point in time your goals (the founders) and the VCs are not yet aligned. You are not yet partners in the same venture, and you are facing the harder part, your opposite party has a ton more experience than you do at these things and small changes in the contract can have huge effects in the longer term. That’s why one of the recurring themes in these blog posts is ‘BYOL’, bring-your-own-lawyer. That way you will have someone who is at least as experienced in the whole dealmaking game and even though this may cost you some money (especially if you end up not consumating the deal), it is probably one of the best investments you can make. It will stop you being taken advantage of or signing a contract that is not the very best for you (and your partners) even if you feel that you are ‘in control’ of the situation (and if that is what you feel when you’re a first time founder and you’re dealing with a venture capital company on it’s 30th or so deal then I can pretty much guarantee you that you are not in control).

All those line-items that are present in the ‘standard contract’ (there is no such thing!) should be considered one-by-one with respect to whether or not you can live with them at all, and what the long term implications of these clauses are given the various scenarios that may play out in the future. Remember that each and every line in a contract like that was born from experience, experience that you don’t yet have where putting that clause in safe-guards the VC from some kind of un-specified risk. Contrary to the name VCs are actually to a large extent risk-averse, they will do everything they can to eliminate risks or to enumerate them so that the risk they are entering into is a known quantity, that still leaves plenty of opportunity for things to go wrong (as the average returns on venture capital prove), but at least they will have mitigated and taken care of the visible portion in so far as this is possible. If your venture is special enough you can push back against any or all of these items, it may cost you the deal but there is no such thing as a bad deal that you did not do. The only bad deals are the ones that you did do and that you end up regretting in the long run.

Remember that you don’t have to sign anything at all. Contracts are entered into of your own free will and if you’re not comfortable with what you are signing then simply don’t. Relax and take the long view, it’s not a disaster if you choose to forego a funding round on terms that you feel are to your disadvantage. Also remember that there is no such thing as ‘a standard clause’. If you don’t want a clause strike it, explain why you don’t want that clause and if the relationship and the deal survive then good. If the relationship and/or the deal does not survive then too bad, then it wasn’t meant to be anyway. But once you do decide to get funded that contract becomes the basis for the future and you can’t go back afterwards and point to ‘that evil VC’ on account of them doing what they are supposed to do in the first place: protect their own interests. Just like you should. That way the ‘Evil VC’ myth can finally die and we’ll be able to look at VCs just like we look at other people, there are good ones, and there are bad ones, but they’re not structurally bad.