Venture Capitalist Cites '$24 Revenue' for 'IP Protocol' in Broad Critique of Funding Trends

Prominent venture capitalist Adam Cochran has publicly lambasted current venture capital funding practices, highlighting a stark disconnect between significant investment rounds and tangible business performance. In a recent social media post, Cochran, a managing partner at Cinneamhain Ventures, presented a critical view of how some "tier 1 backed VC companies" operate.

Cochran's critique, shared on X, detailed a pattern where "cofounders from some prestige background sell VCs on some pie-in-the-sky concept that no one wants." He noted that these companies often "raise $100m+" and proceed to "hire random roles like a chief AI officer for a non-AI startup" despite having "0 users." The ultimate outcome, according to Cochran, is an "exit via OTC deals becoming a multi-millionaire" with founders "stepping back right before vesting renews."

As a pointed example of this trend, Cochran cited an unnamed "IP protocol" that "made $24 in revenue yesterday." He further emphasized the perceived absurdity by stating, "The pitch has also never made sense to anyone who has actually worked with IP licensing." This specific example underscores his broader concern about ventures lacking fundamental business sense or market fit.

Cochran, known for his outspoken commentary on the crypto and blockchain industries, has previously voiced criticisms regarding various market practices, including tokenomics and corporate decisions. His recent comments extend this critical lens to the broader venture capital landscape, questioning the criteria VCs use for investment.

He expressed dismay that "founders who know their industry inside and out, aren’t flash in the pan and spent decades in their field get passed over for the next Stanford kid with buzzwords who puts on a show." Cochran affirmed his personal investment philosophy, stating, "I’ve tried to always have my angel checks go to actual experienced operators, with all the pros and cons that go with it."

The venture capitalist concluded his commentary by questioning the industry's path forward: "But it’s so disheartening that even the 'top VCs' just seem stuck on this loop of rewarding flash over substance. How the hell do we advance as an industry, if you throw money at smoke, mirrors and grift?" His remarks underscore a growing sentiment among some industry observers regarding the need for greater scrutiny and a focus on fundamental value in startup investments.