Why a $10K Coin Auction in Prague Should Be a Wake-Up Call for Tech VCs

As a VC, I hunt for real signals. Not hype. In a founder’s code, I look for craftsmanship. Not just charm. Why? Because real value lives beneath the surface. And a recent $10,000 coin auction in Prague just reminded me why this matters more than ever.

The Hidden Cost of Superficial Due Diligence

We’ve all been there. A startup walks in with a slick demo, a charismatic pitch, and a deck that sparkles. You’re sold. But then, six months in, things slow down. Bugs pile up. Scaling becomes a nightmare. And suddenly, that “sure thing” feels shaky.

The same thing happened in Prague. A 1933-S half-dollar coin sold for $10,000 at auction. It looked pristine—sharp details, crisp edges. But experts later spotted red flags: flattened features, odd spacing in the lettering, a strike too perfect to be real. It wasn’t genuine. It was a counterfeit.

Sound familiar? That’s what happens when we fall for the surface. In venture capital, we can’t afford to be like that buyer. A shiny frontend or a smooth demo isn’t enough. We need to dig. Because in tech, as in rare coins, the difference between real value and a costly mistake is often hidden in plain sight.

The Importance of Technical Due Diligence

When I look at a seed or Series A startup, I don’t just ask, *“Is the product cool?”* I ask, *“Can it last?”*
Just like the coin’s buyer focused on the shine, too many VCs get distracted by visuals and market buzz. But real value? It’s in the code, the architecture, the stack. It’s in whether the tech can scale, survive attacks, and adapt to change.

Think about it:
A coin’s authenticity hinges on subtle details—the depth of the strike, the grain of the metal. Similarly, a startup’s future hinges on modular code, clean architecture, and a team that knows how to build, not just sell.

Was the coin’s arm too flat? Did the “IN” in “LIBERTY” look off? In tech, red flags are just as telling: outdated frameworks, spaghetti code, a founder who says, “We’ll figure out scaling later.”

Red Flags in the Tech Stack

Here’s what I watch for in early-stage startups—the real signs of strength or trouble:

• Code Quality and Architecture: Is the code modular, documented, and maintainable? Or is it a monolith with no escape plan? A clean codebase is like a mint-state coin—flawless, intentional. A clunky monolith? That’s like a coin with a flat, lifeless arm: it looks okay at first, but fails under scrutiny.
• Technology Choices: Are they using modern, supported frameworks? Or are they stuck on legacy systems? A startup with an old stack is like a coin with oddly spaced lettering—it might look right, but it won’t hold up.
• Team Composition: Do they have engineers who actually build? Or just salespeople wearing tech hats? A team with no real tech depth is like a counterfeit—impressive at first glance, hollow inside.
• Security Protocols: Do they patch vulnerabilities? Or do they wait for a breach? A single unaddressed flaw can sink a company. Just like one fake coin ruins a collection.

The Role of Technical Excellence in Valuation

Let’s talk numbers. Technical excellence isn’t just about pride in craftsmanship. It directly affects valuation. A startup with a solid, scalable stack has lower risk. Lower risk means higher multiples. It’s that simple.

Why? Because investors pay for durability. For predictability. For exits that don’t end in fire sales.

Scalability and Future-Proofing

Scalability is non-negotiable. I want to see microservices. Containerization. Cloud-native design. Not because they’re buzzy—but because they work.

Take this example:

// Microservice with Express
const express = require('express');
const app = express();

app.get('/api/users', (req, res) => {
  res.json(users);
});

app.listen(3000, () => {
  console.log('Server running on port 3000');
});

This isn’t just code. It’s a signal. It says: *We’re built to grow. We can add features, handle load, deploy fast.* That’s the kind of startup I want to back.

Technical Debt and Long-Term Costs

Every startup cuts corners. But smart ones have a plan to fix them. Technical debt is like a hairline crack in a rare coin—small, but it devalues everything.

I look for teams with a refactoring roadmap. Automated testing. CI/CD pipelines. Take this:

// Jest test for core logic
test('adds 1 + 2 to equal 3', () => {
  expect(sum(1, 2)).toBe(3);
});

Simple? Yes. But it’s a sign of discipline. It means they care about reliability. And reliability means fewer bugs, fewer outages, fewer panicked calls at 3 a.m.

Case Study: The Coin Auction as a Metaphor for Startup Evaluation

The Prague coin auction wasn’t just about a fake coin. It was about trust. And trust, in tech, is built on substance.

The coin looked perfect—until experts checked the details. Just like a startup’s demo looks perfect—until you ask for the repo.
The coin’s flaws? Flat surfaces. Irregular lettering. No provenance.
The startup’s flaws? Spaghetti code. No test coverage. A CTO who’s never shipped at scale.

Lessons for VC Due Diligence

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1. Scrutinize the Underlying Tech: Don’t fall for the UI. Open the hood. Look at the code. Ask about architecture. What’s *really* under the hood?
2. Engage Technical Advisors: Bring in engineers. Let them review the stack. I’ve seen deals saved by one honest code review. Like the coin experts—they spotted the fraud others missed.
3. Assess the Team’s Technical Depth: Have they built systems before? Can they explain trade-offs? Or do they just talk about “disruption” and “growth hacking”?
4. Evaluate the Unit Economics: How lean is their stack? Do they waste resources on legacy code? Efficiency today means margins tomorrow.

Actionable Takeaways for VCs

Here’s my checklist. Use it before writing a check:

• Conduct a Code Review: Get access. Look for modularity, docs, tests. Is it clean? Or is it a mess?
• Evaluate the Tech Stack: Modern? Secure? Scalable? Or a time bomb?
• Check for Technical Debt: Do they have a plan to fix it? Or are they piling on?
• Interview the Engineering Team: Ask real questions. See how they solve problems, not who’s the loudest.
• Assess Scalability Plans: How do they handle 10x users? 100x? Can they walk you through it?

Conclusion: Depth Over Surface

That $10,000 coin in Prague was a lesson. Not just for collectors—but for all of us in VC.
The market rewards what lasts. Not what shines.

We’re not here to fund illusions. We’re here to back builders—the teams who craft systems, not just slide decks.
So next time you see a startup with a perfect demo, ask: *What’s beneath it?*
Because the real value—like in a true rare coin—isn’t in the shine. It’s in the substance. And that’s what commands a premium.

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