As an super-small-time investor who only owns stock in companies whose products that I use and enjoy, I can't knock them for it. For me, the logic is that whenever I tire of using something or no longer find it valuable, presumably I'll have early insight to sell the stock before the rest of the world catches on. I don't know if that same logic applies to proxy buying, but I suppose if you're intimate enough with your companies to know if they're abandoning Github for something else, as I don't know if pulling venture capital is as easy as selling the stock.
There's generally minimal liquidity. During a round, an existing investor may have the opportunity to sell some shares to new/other investors, but if she knows something that's not coming out during diligence, there's definitely something fishy going on. If the round is shaping up to be a major up-round, maybe an early investor wants to lock in a good return, but that's beside the point here. And then of course if things really aren't going well for the company, you're looking at the bad kind of liquidity event--a liquidation.
So if a VC wants to pull out based on a negative hunch, it's probably either impossible or the signal itself will doom the company if it wasn't already doomed.
Just my 2 cents as a first-time founder.
Is that a skewed view? Are there many big companies that would disappear without being able to move to a different platform in under 2 weeks?
I believe no VC is going to invest $50 million dollars purely in hope of vaguely helping the rest of their portfolio. While at the same time vaguely helping every other startup in existence, thus negating any advantage that might accrue to their own companies.
