I&#x27;ve come to the conclusion that most VCs do not care at all about technical due diligence, or more broadly speeking analyzing the idea from the inside. They look at trends, momentum, traction, etc. It doesn&#x27;t help that they are investing other people&#x27;s money.<p>There&#x27;s some logic to that: they can&#x27;t invest the time and effort to understand all the problems in all the industries inside out. As a result, they look for proxies. The flip side is they get bitten by Goodhart&#x27;s law. They end up being adversely selected by founders who mimic the signals the VCs have learned to pick up on.<p>Technology X is trending? Problem Y is a big problem? They&#x27;ll fund a company that applies X to solve Y without asking themselves if X <i>can</i> actually solve Y or isn&#x27;t even suited to solve Y. It&#x27;s harder to be gamed if instead of following such trends you focus - as YC seems to be doing - on founder based signals. But people learn to mimic those signals too.<p>Signals which are costly to fake tend to be better. So investors will pay close attention to those. For instance, working full time on a project pre-seed investment instead of being payed for a full time job is a costly proposal, and thus potentially a good signal for investors. The flip side is that it can be faked by people with mediocre skills and no real opportunity cost, or people who are otherwise financially secure.