What would the value add be of getting the money faster or with less stress vs. the value add talked about in the article? I'm thinking that perhaps security tokens may change the dynamic in the future because they allow a founder to raise seed money faster with less unfavorable conditions.
Fundraising is a distraction. A founder who is engaged in fundraising finds it difficult to focus on their actual business. Being able to get back to the business quickly therefore provides a very obvious value proposition for the founder.
VCs have the rather different requirements. People looking for their money is an ongoing activity for them, so there is no particular advantage in ending that dance with any particular founder. Indeed, not being in a hurry to make a deal when the other side is improves their bargaining position. (Unless someone else is faster.) And the more likely they are to hear about a showstopper that would make them decide to not invest.
The result is that VCs want to drag negotiations on as long as possible..right until the moment that it is clear that some other VC is leading the investment and their possibility of getting a piece of the action is slipping away.
This is why what YCombinator does works so well. They decide very fast on whether you're in a batch. They standardize terms, which makes it harder for investors to drag their feet. And on demo day, every investor knows that they are competing with other investors in an investment round that will close quickly. This forces them to make a go/no-go decision.
Interestingly, the fact that founders get to raise money quickly and get back to their business improves their businesses odds of survival. Which improves the prospects for investing in them.
