Vincent Woo, a former founder turned independent journalist known for his insights on tech and education, dives deep into the world of venture capital. He discusses the precarious expectations placed on startups, especially in sectors like health and education, where rapid growth is often unrealistic. The conversation highlights Lambda School's controversial journey and raises questions about the pressures of VC funding that can lead to poor decision-making. Woo emphasizes the need for a recalibration of expectations in a landscape driven by high valuations.
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question_answer ANECDOTE
Ro's Expansion and Acquisition Spree
Ro, initially known for ED pills, expanded into various health verticals after raising $500 million.
This funding fueled acquisitions, but internal product development faltered, causing employee departures.
insights INSIGHT
Acquisitions Rarely Pan Out
Buying revenue through acquisitions is uncommon, except for well-funded companies.
Verticals acquired through acquisitions rarely succeed, unlike organic growth.
question_answer ANECDOTE
Lambda School's Rise
Lambda School gained popularity as a remote coding bootcamp with Income Sharing Agreements (ISAs).
Austin Allred, CEO, discovered high demand when he offered deferred payment options.
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This is our Wednesday show, the time of the week when we niche down to a single topic. Today? The issue of venture capital expectations in certain sectors where startups may not be the best fit. And what happens when they raise a mountain of capital.
Natasha and Alex had former founder and present-day indie journalist Vincent Woo to come on the show with us. Why? Because he's written extensively about Lambda School, one of our subjects of the day.
Next we chatted Lambda School, which has a well-documented history of raising venture capital and attracting controversy. Most recently, Woo published a piece about the coding bootcamp's misleading claims on job placement. The company is perhaps a cautionary tale of how venture-level growth can struggle in certain sectors. Education is hard and may not scale like software.
At the heart of conversation was a question: In this time of high valuations and easy access to large amounts of capital, how can VC incentives lead some startups into a cycle of pain? We didn't land on a single conclusion, and that was kind of the point of the episode. Venture capital isn't inherently bad or good, but the money can come with a list of demands (and pressures) that cause risk-taking founders to make mistakes. A recalibration is necessary, but, as we talk about every week, the "up and to the right" market will take its time getting there.
It was good fun to focus on a single topic, but we're back with our news roundup Friday morning! Chat soon!
Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.
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