Only halfway. Don't the GPs have skin in the game?

... Although given how frequently the Ontario Teachers' Pension fund has made the 'Pension funds invests into an incredibly dumb startup' news cycle, I suppose grifters, thieves, and conmen might consider them to be an easy mark.

This would be between 5 and 10% or so.

Yes, commonly [1]. At the portfolio level, VC is about as risky as buyout [2].

[1] https://www.thebusinessofvc.com/blog/lp-universe?format=amp

[2] https://timesofe.com/vc-fund-returns-are-more-skewed-than-yo...

example: https://reason.org/commentary/with-interest-rates-low-us-pen...

(You can imagine batshit pension funds that invest directly in crypto/defi stuff; that's extremely problematic.)

Give us your money to invest in this new, fresh face that's going to change the world.

If you're an old face - why haven't you changed the world already?

The story isn't as catchy.

It has nothing to do with what makes sense. For a large subset of VC (obviously not all) - it's more about what you believe you can sell to others than what you believe is actually going to succeed.

Maybe hire earlier, as soon as an adult is needed to set up proper structure, processes and operations. If a company screws this up, e.g. when inexperienced founders hire former COOs and senior VPs from big names for those big names only, things can turn south pretty well.

[1] seems ridiculously low BTW, that's a line manager or extremely skilled software engineer at a FAANG, VPs make multiple millions per year.

[2] and anyone running a crypto startup should.

It'll be interesting to see how VC changes in the modern environment - will they still be all-in on founders willing to unsustainably burn money just to incrementally boost the probability of growth, or will they begin looking more for experienced operating teams who reach and maintain profitability (or a rapid path to get there at all times)?

That's pretty documented in the history of Uber :-)

Turns out unsurprisingly, if your revenue is negative and you multiply it by 1000000 it's really negative.

Wild Ride: Inside Uber's Quest for World Domination is mostly a summary of the headlines involving the company rather than a tell-all but it's accurate enough if you want to familiarize yourself with the subject.

I don't believe anyone has written a book about the technology team specifically which is sad because they actually made some really great technology, especially in the monitoring space, and I would love to hear the story of how that came to be.

I don't expect anything to change because it never does.

From some previous experience, outside of crypto - which was DIFFERENT™ - this already started changing in 2019 or so. Softbank was one of the most infamous players, and when they started to pull back, so did some others.

Not that there aren't still some "huh"-inducing things - like the new thing from the WeWork guy - but it seems a bit saner-paced on the ground, and now even crypto will get its reckoning.

Option A- you task some employees with buying office furniture and equipment and then waste everyone's time by having some extra meetings and emails and bureaucracy where someone asks "is that a good price for 50 desks? Did you get multiple quotes?" and the employee says "yes" and then they approve the expense.

Option B- the same employees make the same decisions, but without the extra meetings and emails and paperwork.

Being more efficient, giving employees more autonomy and focusing on what actually matters is why startups displace incumbents. These are good things.

It's much, much harder to make millions at the poker table than it is to get a degree from an Ivy.

There have been 141 people that have made over a million in 2022 from poker (https://pokerdb.thehendonmob.com/ranking/7339/2) and that doesn't count all of their losses, staking, etc.

The eight Ivies collectively graduate roughly 75,000 people a year.

So I'm not really sure what information the statistic that there are about 140 Poker millionaires in a year vs 75k Ivy grads conveys.

Poker is played competitively both online and in the casinos of every country all over the world 24/7. There are a phenomenal number of players compared to Ivy league students.

Unlike the lottery, it is also largely considered to be a game of skill based on a combination of statistics and social manipulation.

GP is generally implying that because the ratio of players to successful players is so small for a game so widespread that is is very difficult and requires a huge amount of skill to make a significant amount of money playing poker.

If you do truly think it's no different to the lottery, I'm interested in your explanation as to why these people (a) come from the background they do (a high schooler with decent maths can tell you why the lottery is -EV) and (b) go on to the careers they go on to.

Poker isn't particularly luck-based, especially if you play a large number of hands, as eventually everyone sees the same cards on average.

Also, poker doesn't have legacy admissions - the people that win at poker consistently always deserve their status.

Zac would never use software to cheat online. That doesn't sound like something Zac Prince would do whatsoever. Not the Zac Prince I know who has always been above board in all aspects of his life. No drugs in the office. No extramarital affairs also in the office. Nothing of the sort. Classy guy all around, Zac Prince.

BlockFi is just incompetence without the SBF-like malice.

BlockFi is just your typical blockchain company, a complete waste of money if not a scam, see FTX, Terra, BitConnect, MtGox and so on. An exception to the rule would be a company that's not a complete disaster run by ignorant, arrogant scammers.

> talked to an employee that left last spring. She said they had literally no idea what they were doing. The founders are just ivy educated 30 year olds

So was SBF (MIT) and raised from Sequoia and Blackrok and his GF was a Stanford'ite with a Math degree and is responsible for the largest loss of funds from that cluster**.

Can we finally admit the biggest scammers in this space are those from Ivy League, and connections with traditional VC without out a clue of what they are doing or how this tech actually works; as a fintech boot strapped founder and with over a decade in the Bitcoin community its been fairly obvious for at least 7 years since Blythe Masters and all her cronies from traditional finance got involved this was the case.

Maybe now the rest of you vocal sideliners can finally see that is the case and most of you are part of the problem more than most of us who have built startuprs using this tech without any of those things and did it the hard way outside of the VC/SV Ivy League World.

What? Why are we the problem?

This may just be me because I from CA and was inspired to work in tech as kid in the 90s and saw the drastic and detrimental culture changes that have come over the years/decades: many of you keep attributing these scamming events to us when in reality you FAANG/SV/VC insider types likely went to school or worked with them and turned a blind eye to this very obvious behavior that bred this culture; if you worked for or with them you likely even enabled this behavior in order to clout/status chase for a 'disrupter's' reference or network connections for funding. I've seen it far too often, and somehow for calling it out we become 'persona non-grata' in our homes because trnsplants who only came to SV for the money and status rather than make remarkable tools and disrupt legacy gate-keepers 'want to get theirs' all while all playing some odd cosplay to the contrary.

The truth is that the tech that underlies cryptocurrency's like Bitcoin have it's roots in SV and has been advocated by Cypherpunks from the late 80s-90s and many of it's most notable people in this space were around in that time (eg Hal Finney worked for Phil Zimmerman during the Crypto wars and took on the US Government and risked prison). And it's a slap in the face to be told how we're not wanted or just scamming people with our focus and pursuits in tech because of this gross over-generalization that is based on an immense blind spot that who you are talking about is within your side more often than amongst out own--I admit we have had scams but the most notable are due to incompetence and ignorance in dealing with new tech (MTGOX) in real-time rather than an outright desire to scam.

Bad players have existed in Bitcoin, I've seen it plenty of times, but as is the case with the biggest ones like FTX and BlockFi it tends to be from your ilk, not ours.

But it's more fun when other's help drive the point further for me!

I would also include conbase (not a typo) ties to Goldman Sacs and YC, but unless you've seen its horrible descent over the years you wont know why they should be included.

I guess I have to quote myself here, and re-emphasize that they are all part of the same group of insiders:

>>Can we finally admit the biggest scammers in this space are those from Ivy League, and connections with SV insiders traditional VC/Banking/Finance without out a clue of what they are doing or how this tech actually works

I worked at a megacorp pushing 'blockchian not bitcoin' BS and it was only because they realized they couldn't co-op it and instead ran with alts that ended up getting investigated by the SEC.

Let me makes this very clear: I've been on both sides of this equation and I can assure you even though we didn't have much if any money on the BTC side until very recently (most traditional and VC money went to these insiders) those of us that built companies had to knew how this tech worked and often had to built the infrastructure from the ground up.

I personally couldn't even code until I got into BTC despite having several opportunities to do so, because this space demands that you do since it moves so fast and the pace of innovation requires you to know how it all works otherwise you get left behind. And because of this it becomes very clear who knows what they're talking about and who doesn't when you start to hear the merits of a 'private blockchain' and realize what they're describing is essentially just a SQL database with different branding but totally not that bitcoin thing or why the Byzantine General's problem was thought to be unsolvable by Computer Science prior to Bitcoin, let alone how the mempool works or what a UTXO is.

Leadership decided it was useful to have as something to prove we knew had great tech. But really wanted to do manual sales of other services. They were only looking at next quarter profits. Not seizing the industry.

Finally left in disgust. They gradually faded as manual wasn’t scalable. Was years before I saw comparable competitors.

1) some people are rich and want to get richer

2) Ivy educated VCs invest money for group (1) in start-up companies, while paying themselves handsomely with that same pool of money

3) Ivy educated kids start companies using money from group (2), while paying themselves handsomely with that same pool of money

4) sometimes, through a combo of hard work, skill and luck, things work out and everyone makes more money than was spent

5) sometimes, because they are mostly, actually a bunch of yahoos and/or scammers, things don't work out and group (1) loses their money

There are some oversimplifications here, but in general, this seems to be the way.

As a naive and younger outsider I always thought these people were all very competent. Clearly there is something very different going on here.

This. I’m getting annoyed with my jQuery/Spring app with ~million of revenue that I can’t get sexy for employees nor for funding; sometimes I want to throw away ethics and say we’re building “a blockchain of solar-powered AI european-central-bank ledgers”. It would be so much easier. Nah, we’re just storied field data in 7 tables, and customers love it.

But the tide is turning. I have a friend who mentioned the blockchain on his funding papers and he can’t even get an office in my city (France). I’m happy the tide finally turns for the blockchain, to value it for what it’s worth: A good idea for 1% of the present usecases, and bad idea for everything else. Even though not being able to sign an office lease for insurance reasons is quite comical.

The graph of investment in software starts high with greenfield projects, drops over time to an all-time low as optimizations take hold, and as the software continues existing will rise to the greenfield (or more) levels of cost. The interesting thing to me is what substantiates the rises; for instance, in greenfield experimentation and iteration is what costs the most. In old software it's usually the employees.

I'd love to actually document this sometime.

But there is always this HN comment with, no matter how much you pay, they put exclamation marks about how little the compensations are in France and how 35hrs is too long or having to be in office a few days a week is the bane of their existence. I’m always wondering whether we’re unionized here, it looks like a systematic complaint, no matter the conditions.

Well, I don’t know, create your own company I guess.

This model of yours suggests that rich people played with fire and rich people got burned.

Is that what is happening? That doesn't seem to be a complete model.

On that basis, the FTX thing is kind of baffling because the financial controls would seem to be core to the thesis. Having read some of the things sequoia said about their original meetings with SBF it seems they were dazzled by him personally and allowed their greed to overcome basic prudence.

[1] So for example for SVF I had to go through all the transitive dependencies of all our software (which for JS and python is generally a lot), check the licenses and actually track down authors of a few packages in the node ecosystem and ask the authors to explicitly license their software so we knew we had a right to “depend” on it.

Here’s a true story: a friend and former startup coworker got verbal agreement on funding a startup. His business pitch consisted only of a list of names of people he’d worked with in the past who could execute well.

The Fed has been on a money-printing spree since 2008 [0]. The idea was that it would create jobs and stimulate economic activity. In reality, it lowered the bar for things considered investable, so the Ivy-educated VCs were trying to tap into that stream of cheap money, while paying themselves handsomely. Either get acquired (using cheap debt that will also be used to pay the acquiring execs) or IPOed (using the excess money from the public). Profitability was out of question for at least a decade.

[0] https://tradingeconomics.com/united-states/money-supply-m0

These crypto companies are primarily capitalized by VC and selling crypto.

Alternative "assets" like crypto gained more credence when rates were low. Bond returns in such a regime were not attractive, equity markets rallied to elevated levels, and there was little incentive for debt issuers to use free cash to pay down debt that could be rolled out into perpetuity.

The Fed essentially held the cost of money near zero and that had far-reaching effects.

As investors flow into the equity market, stock prices are bid up to the point at which expected returns for stocks also become unattractive. At this point, the logical next move for global, institutional investors is to move to more risky investment options such as private equity and venture capital. This is exactly what we’ve seen."

Other quick links:

http://jibe-net.com/journals/jibe/Vol_8_No_2_December_2020/1...

https://www.taylorfrancis.com/chapters/edit/10.4324/97810031...

Isn’t true for 80% of white collar industries?