While most outsiders think a VC's job is the same as a stock picker, which is to make better decision in buying stocks than others. It could not be further away from the truth.

90% of our job is sell-side, if not more. Making the buy-side investment decisions is key to our eventual financial performances. However, without the 90% of sell-side effort, we may never get to choose, to exit and even to have the money to invest!

On the EMS side, they now have all the incentives now to "pump up" the numbers of NREs. What might well have been a healthy $500k NRE might suddenly be listed as $1.5M, including many service items that were not necessary for a startup.

On the startup side, it will try to use a high valuation to bring down the dilution but the EMS might never agree with its valuation since most early-stage startups are pre-revenue. EMS's thinking is all about P&L numbers. Without revenue numbers, it could not even "pretend to" do a proper valuation.

This debate could drag on for months. The next thing you know, product shipments are delayed, cash burns out, other VC investors walk away and a promising startup dies for wasting too much time on this wrong debate for no good reason.

This means that the discovery process of a hardware product is vastly different from the discovery process of a pure software app. It's not correlated to the app download slowdown we're observing now.

It is therefore entirely possible that a different scenario emerges: consumers buy a new connected hardware product, download the necessary app to run it and get hooked by the great UI/UX.

Note that any time of the day you could run into a random rich guy that appears to love your startup at the first sight like no one else. However, by taking his $200k (which means nothing to him) for a $20M valuation could block other real value-adding VCs to join the round.

Worse, it might block the next round completely as well if you can't grow the company fast enough to justify a valuation higher than $20M in the next round.

The truth is, today a lot of the expenditures categorized as marketing in accounting are actually channel costs. Specifically I'm talking about the on-line advertisements on Google, Facebook, Twitter or any other social network platforms.

Whether it's in the forms of texts, images or videos, the kind of on-line advertisements that lead the users to the product pages on the web stores usually do not contribute to the general perception of the brand.

As we see in the consolidated income statements of Alphabet Inc., in 2015 the company as a whole generated almost $75B worth of revenue, out of which (see blow) direct advertising revenues is about $67.4B, or about 90% of all its revenue.

For example, I've seen good product design but extremely ugly slides, indicating that the founding team has little sense in what a good design is. This is not to say the founders have to be designers themselves. However, if design is supposed to be a big differentiator for the product, the lack of design thinking in the founders is lethal, as anyone could hire the same design agency to deliver similarly attract hardware products and the entrepreneurs won't be able to evolve and defend themselves.

In the dot-com bubble of the late 90's, many startups were doing B2B businesses that were basically selling services or products to other startups. When the public market was red hot, the VC funding was ample as well. When the VC funding was ample, the startups were buying services from other startups. However, at the very end of this value chain, the consumers hadn't picked up the slack yet. As a result, most of the B2B sales stayed just like as B2B sales among VC-backed startups, without the final undertakers that were the consumers.

Burn rate is basically how much money a startup is burning every month. In good times it gives a first estimate of how much time you have before you successfully raise the next round. In bad times it gives a first estimate of how much time you have before you could become self-sustainable – or pass the point of no return which is called death, because the next round might not happen very soon.