Minsky Moments in Venture Capital

Re:Minsky Moments in Venture Capital by lordnacho on Monday February 21, 2022 @07:32AM (#30415147)

One thing I always wondered as a hedge fund guy was where all the reports of VC/PE doing badly went. You always hear about some hedge fund blowing up or having a terrible month, but I seem to never hear any bad news from the private markets world. In fact it's all "we returned 10x capital" which is pretty good even if it takes a few years, especially if there's no losses. Even Softbank seems to be doing okay considering the sheer scale of bad press.

Of course PE is a bit different to VC in the leverage, and might be a candidate for Minsky moments through the traditional credit spiral.

This essay gives a plausible alternative route for VC and clarifies what actually makes the spiral happen.

But for both I just struggle to think of many bad events other than WeWork, which hasn't even died.

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Re:Minsky Moments in Venture Capital by MichaelZuo on Monday February 21, 2022 @07:40AM (#30415223)

Didn’t Uber have a down round? They didn’t implode of course but it seems like it did significantly affect their trajectory.

I can’t think of any big YC company with a down round + death spiral, but I think maybe one of the Techstars companies?

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Re:Minsky Moments in Venture Capital by swrj on Monday February 21, 2022 @04:27PM (#30420829)

There is a good list of startups that went bankrupt here: https://www.cbinsights.com/research/startup-failure-post-mor... Katerra seems like the latest big one - $1.5B in funding that filed for chapter 11 last year.

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Re:Minsky Moments in Venture Capital by arbuge on Monday February 21, 2022 @09:25AM (#30416186)

Homejoy perhaps?

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Re:Minsky Moments in Venture Capital by MichaelZuo on Monday February 21, 2022 @01:12PM (#30418816)

Wasn’t a unicorn I believe but seems close enough.

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Re:Minsky Moments in Venture Capital by atdrummond on Monday February 21, 2022 @11:18AM (#30417485)

It's mainly confined to industry specific news sources but alternative asset data firms like Preqin definitely report on this info. And it makes sense that this info would be out there for two reasons: 1. Institutional investors, like CPPIB, who still invest in alternatives need a way to objectively compare funds and 2. VCs and PE, just like HF, both under-perform the markets outside a small set of firms that return genuine alpha consistently - just like hedge funds.

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Re:Minsky Moments in Venture Capital by JumpCrisscross on Monday February 21, 2022 @08:02AM (#30415433)

> I seem to never hear any bad news from the private markets world

The names are less recognisable, so the stories don’t get as much traction in the popular, paywall-free press. But plenty of funds shut down, some quite spectacularly, e.g. Rothenberg.

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Re:Minsky Moments in Venture Capital by ewuhic on Tuesday February 22, 2022 @03:07AM (#30425209)

Possibly silly question: how does one transition from software engineering to hedge fund management?

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