Cloudflare's CEO listed his three worst VC stories — and the thread named names

Why the CEO of an $88B company is airing his VC scars

Matthew Prince — co-founder and CEO of Cloudflare — posted a thread on X (writing as eastdakota) recounting three of his worst VC stories. The source is X, so it doesn't render cleanly for everyone; a thread commenter mirrored it via a non-X reader. The hook lands because of who's telling it: Cloudflare is now valued around $88 billion, and it's a piece of Silicon Valley folklore that nearly every brand-name VC passed on it when Prince was raising. The man the smart money rejected is now grading the smart money.

What the three stories actually were

Reconstructed from how the HN thread quotes and reacts to the posts (the original is on X, attribute with that caveat):

• Story #1 is the one HN regulars recognised on sight — the perennial, rarely-quoted-verbatim tale of a top-tier VC delivering a brutal lowball or ultimatum in a room. "I hear story #1 periodically, but almost never see a quote," wrote a commenter who'd only ever heard it as hearsay, underscoring that Prince finally put words to a piece of valley legend.
• Story #2 centres on Vinod Khosla — named directly in the thread — and a piece of investor behaviour ugly enough that one commenter, after reading it, went and looked at Marc Andreessen's profile and concluded the genre is its own subculture.
• Story #3 is the one that detonated: a VC openly advising a founder to betray his own team. As one reader put it, the VC was effectively advertising his own future behaviour.

(Worth flagging the thread's own uncertainty: "Did the author edit the tweet/post or am I crazy? There are only two stories," one reader asked — so the count may have shifted after posting.)

The thread: founders and angels pile on

The most-upvoted response zeroed in on Story #3's self-defeating logic:

"#3 is insane … the VC is signaling that he's likely going to try and do the same thing to you some day… why would you ever get involved with that VC given you'll then have to watch your back until the end of time?" — a commenter on the self-incrimination of Story #3

An angel investor in devtools confirmed the genre from inside, and asked the cui-bono question:

"theres always a story behind the story. wondering why he chose today to say these" — swyx, devtools angel and writer

A founder-operator said the public stories barely scratch it:

"I could write a book with the horror stories I have of VC and LP behavior, and some of the wild stuff I've either been asked to do, verified others were asked to do… totally unhinged." — a founder with first-hand LP and VC horror stories

And the contrarian counter-read — the one that actually complicates the morality play:

"every VC who passed on Cloudflare missed out on what is now an $88 billion company. On the other, if they didn't invest because they didn't like the underlying economics, they were actually correct. 17 years after founding, Cloudflare still has never turned a profit." — a commenter on the unit-economics defence of the VCs who passed

Not everyone took the morality tale at face value: "As bad as these VCs seem to be it's something to see Prince socializing with other bad actors … while lamenting the bad actors in the space," noted a software engineer questioning the messenger.

The bootstrapper's takeaway

The through-line the thread keeps returning to isn't 'VCs are villains' — it's that the incentives diverge by design. "VCs are pursuing a diversification strategy while founders are pursuing a singleton strategy," as one commenter framed it: your one life's work is one bet in their portfolio of fifty. Several founders drew the obvious conclusion — "More and more I see why bootstrapping is the way to go," wrote a maker of many things. The irony Prince embodies: Cloudflare took the money, got the horror stories, became worth $88B — and still hasn't turned a profit, which means the VCs who passed weren't entirely wrong about the numbers, only about the outcome.