Naval's VC Education

A story about how Naval Ravikant's negative experience with VCs led him to create Venture Hacks to help other founders.

"Naval created a site called Opinions during the dotcom boom - it was like Yelp but for products. The company was working, but he got screwed by his VCs. He disagreed with his cofounder, the VCs took the cofounder's side, and they bought back his shares for very little. Later, the company had some success but Naval didn't get the win he would have been owed.

He took accountability and realized he put himself in a position where VCs could legally act poorly towards him. This experience got him interested in term sheets and contracts. As a founder, when an investor hands you documents, they tell you 'it's all standard' and you don't know how to push back.

This led him to create Venture Hacks, which was a blog that demystified term sheets for founders. He wrote about what founders need to know about raising money, what terms to avoid, and which VCs were good. It wasn't necessarily a business he started, but it became a resource to help founders understand the fundraising process and deal terms."