Prince catalogs three specific patterns — pulled term sheets after competing offers are declined, leaked confidential metrics surfacing in portfolio company memos, and partner switches that strand founders with replacements who have no conviction in the deal. By naming the patterns rather than the firms, he signals these aren't isolated bad actors but recurring structural behaviors that any Series B founder will encounter.
By surfacing Prince's thread to HN's front page with 207 points, the submitter signals that the founder community sees these patterns as worth amplifying. The submission framing — 'Three of our worst VC stories' — treats Prince's account as instructive war stories rather than one-off grievances.
The editorial argues that none of the three patterns are new to anyone who has raised money — what makes this notable is that Prince, a measured public-company CEO who normally posts about TLS rollouts and AS-path security, is willing to burn reputational capital to surface them. The implication is that current VC behavior is bad enough to break a normally restrained CEO's posting discipline.
The editorial situates Prince's thread within a market context where Series B medians are down 38% from the 2021 peak, time-to-close has more than doubled to 14 weeks, and last-week re-trades are at all-time highs. Under this framing, the behaviors Prince describes aren't anomalies but the natural output of a market where leads have leverage and founders have fewer alternatives.
Matthew Prince, Cloudflare's CEO and co-founder, posted a thread on X cataloguing what he describes as the three worst VC stories in the company's fundraising history. The post (status 2062860530360959273, mirrored on xcancel after the original drew 207 points and front-page placement on Hacker News) is unusual because Prince — who took Cloudflare public in 2019 at a $4.4B valuation and now runs a ~$50B market-cap company — names patterns rather than firms, but the patterns are specific enough that anyone who has raised a Series B will recognize them.
The three stories Prince walks through are variations on a theme. The first is the pulled term sheet: a lead commits, the founder turns down competing offers, then the lead's investment committee "surfaces concerns" 48 hours before signing and asks for a 30% valuation cut. The second is the leaked deck: confidential metrics shared under an NDA show up in a portfolio company's strategy memo within weeks. The third is the partner switch — the partner who championed the deal leaves the firm or gets demoted between term sheet and close, and the replacement partner has no relationship, no conviction, and no incentive to defend the original terms.
None of this is novel to anyone who has raised money. What's novel is the source. Prince is one of the more measured public-company CEOs on the platform — his usual posts are about AS-path security, post-quantum TLS rollouts, and the occasional jab at AWS egress fees. When he breaks form to talk about VC behavior, the signal is that the patterns are bad enough to be worth burning a small amount of reputational capital to surface.
The thread lands during a specific window. The 2026 venture market is the tightest it has been since 2016: Series B median pre-money is down 38% from the 2021 peak, time-to-close has stretched from 6 weeks to 14, and the share of rounds with re-traded terms in the final week is at an all-time high according to Carta's Q1 data. When capital is abundant, the pulled-term-sheet move is rare because the lead loses reputation in a small pond. When capital is scarce, the calculus flips — the lead knows the founder has nowhere else to go, and the reputational cost of a single re-trade is dwarfed by the markup on the cheaper round.
The Hacker News comment thread on Prince's post is where the practitioner value emerges. Founders who have raised between 2010 and 2025 chimed in with their own stories, and a rough taxonomy fell out: (1) the "diligence theatre" extension, where a lead drags reference calls for 3 weeks to watch the runway compress; (2) the "co-investor coup," where a follow-on investor uses pro-rata rights to block a strategic acquirer; (3) the "founder-friendly" board seat that quietly accumulates protective provisions across three financings until the founder no longer controls hiring. None of these show up in the standard YC pitch-deck advice because they happen post-term-sheet, when the founder has the least leverage and the least appetite to walk away.
What Prince's thread does — and what makes it worth a top-of-page slot — is normalize naming the behavior. The VC industry has spent two decades training founders that "burning a bridge" with a firm is career-ending; the empirical evidence is that the firms with the worst behavior have the longest memories and the founders with the most leverage are the ones willing to name names. Stripe's Collisons, Figma's Dylan Field, and now Prince have all, at different times, declined to take money from specific firms and been explicit about why. The asymmetry in the bridge-burning narrative is the actual lesson.
There's also a structural point buried in the thread that's worth surfacing. Prince notes that in each of the three cases, the bad behavior was downstream of the partner's misaligned incentives, not malice. The partner who pulled the term sheet had just lost a different deal and needed to show the IC a win at any price. The partner who leaked the deck was trying to help a struggling portfolio company. The partner-switch case was simple comp restructuring. The diagnostic question for a founder isn't "is this firm trustworthy" — it's "what does this specific partner need this quarter, and does my deal help or hurt that."
If you're raising right now, three concrete moves drop out of the thread. First, never single-thread. The pulled-term-sheet move only works if the founder has already declined the alternatives. Run parallel processes through to signing — the social cost with the other firms is real but recoverable; the alternative is a 30% haircut and a cap-table reset.
Second, paper everything. Email is your friend. "To confirm our 10am call: $40M at $200M pre, standard 1x non-participating, 8% option pool pre-financing, signing by Friday" — sent within 60 minutes of every conversation — is the cheapest insurance you'll ever buy. Most re-trades collapse the moment the founder forwards a six-week-old email to the partner's managing director.
Third, diligence your partner, not just the firm. Ask the partner directly: "How many deals have you led in the last 18 months, what's your IC's hit rate on those, and which of your portfolio companies should I call who had a tough quarter." A partner who can't or won't answer the third question is signaling something. The reference calls founders skip are exactly the ones that surface the patterns Prince is describing.
For engineering leaders watching from inside an already-funded company, the operational lesson is different: the board-level behavior Prince describes — the partner-switch, the protective-provision creep — is what shapes whether you'll get to ship a controversial roadmap in year four. The fundraising round you weren't in the room for is the one that decided whether your CEO can say yes to your platform rewrite.
The Prince thread will get screenshotted, attributed, and forwarded for the next decade because it's specific without being litigable. Expect more public-company CEOs to follow — the market is tight enough, and the reputational asymmetry has flipped enough, that the cost-benefit of naming patterns now favors the founders. The firms that built their brands on "founder-friendly" marketing in the ZIRP era are about to find out that founder-friendly is a behavior, not a tagline, and that the receipts have been kept.
<a href="https://xcancel.com/eastdakota/status/2062860530360959273" rel="nofollow">https://xcancel.com/eastdakota/status/2062860530360959273</a>
→ read on Hacker NewsI once had a VC ask to meet my founders and I for his morning breakfast at a run down diner in texas. So we fly out from Florida pitch deck in hand, and meet him at his booth.We pull out the deck, he says "Do not need that. How many paying customers do you have?"Given we were at MVP stage
#3 is insane, if for no other reason than the VC is signaling that he’s likely going to try and do the same thing to you some day… even if you were totally willing to screw over your team, why would you ever get involved with that VC given you’ll then have to watch your back until the end of time?
All I ever hear are horror stories. Can someone tell me a good story about VC that isn't Facebook or something?
The first I heard of Cloudflare was a recommendation from someone who used to DDoS websites (and yes they've been arrested for related crimes, long story), and I thought "what the heck is Cloudflare" then over the coming years, I kept seeing other friends using it. It's really in
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I started a new company with my cofounder 6 months ago. We focused on what people wanted, built a manual solution then automated it. We have 60% margins and a system ready to scale. We are thinking of avoiding investments. I am not sure if we are in a new moment in time where investments are somethi