The Snowball or the Snowflake
A startup needs to get into a loop. It needs to keep pulling in more resources as it grows. Talent. Money. Brand. Customers. Revenue. Government relationships.
Marc Andreessen calls it the snowball effect. You're either a snowball rolling downhill, gaining mass with every rotation. Or you're a snowflake sitting at the top of the hill going nowhere.
A startup needs to get into a loop where it's accruing more and more resources as it goes.
The Matthew Principle
Economists call it preferential attachment. The Bible calls it the Matthew Principle. To he who has, more will be given.
When a company gets momentum, every resource it needs starts flowing toward it. The best engineers want to join. The best investors want to fund it. Customers want to buy. That's what momentum means in practice.
Momentum means the next resource you need is willing to attach to you instead of your competitor.
The Chicken-and-Egg Problem
Here's the trap. Top security engineers only want to work at top companies. But you're a brand new startup. How do you convince them you'll become a top company?
You raise money from a top-tier VC. That VC's name on your cap table signals credibility. It tells talent, customers, and the market: this company is worth betting on.
The best talent wants to work at the best companies. VCs break the chicken-and-egg cycle.
Credibility on Loan
Andreessen puts it plainly. A top-tier VC is a bridge loan of credibility. The startup might deserve that credibility. But it doesn't have it yet.
That borrowed credibility gets harvested three ways. People join. Money follows. Brand builds. The loan pays for itself if the startup executes.
VC credibility converts into talent, capital, and brand. That's the real product.