There are success stories in tech at least.

Crypto only has "Bitcoin has above market returns" in terms of success.

There was some neat smart contract stuff but some of that technically breaks trading rules (aka is questionable legality) and others are a coin flip as to whether a vulnerability will let someone drain the entire fund.

The S&P 500 pays out half a trillion in dividends each year, and performs another half a trillion worth of stock buybacks, funded by the profits from the economic activities of the traded companies.

It's not all "number goes up"/a zero sum game of early investors selling to later investors.

> Crypto only has "Bitcoin has above market returns" in terms of success.

Ethereum is equally successful.

I know you're exaggerating for effect but I'm having trouble threading the needle here. The "average VC tech company" gets nowhere near public market investors and, if indeed it is run "as a pump and dump scheme" would have a narrow impact on the LPs of the venture funds. Gotta imagine most LPs are sophisticated investors? Pension funds, that sort of thing.

Crypto, on the other hand, seems to be predicated on retail investors and consumers. So they do seem manifestly different as you have expressed them (maybe my issue is with the notion of the "average" VC-backed company?).

In the principle of charity, I would assume that the GP meant average tech companies that reach public markets via IPOs or SPACs. Just look at the performance of those in the last few years. They have crashed much harder than S&P.

VC is the search for unicorns. Fund 50 companies and 1 will make back the costs of the other 49 and then some.

By design the average VC tech company (the 49) is a flaming failure. That doesn't mean they can't be packaged up and sold.

Totally get the dynamics of venture capital, but there seems to be a very big gap between funding 50 companies with 1 returning the entire fund and what OP described which is the "average" VC-backed company eventually being used to attempt to defraud unsophisticated consumer and public market investors.

Couldn't agree more on the VC front.

To take it even further, what provides more value? Instagram or OpenSea (NFT marketplace)?

When you stop and think about it, it's the Spiderman meme. They are both pretty useless and are most likely a net negative to society.

Both may be a net negative to society, but the major social media companies collect quite a lot in advertising revenue, and are thus profitable to the shareholders.

OpenSea was only profitable while there were still suckers available. Not at all the same.

Instagram is more like Exxon or something. A very profitable enterprise whose social harms may not be adequately internalized, and would require legislation to fix.

profitable != providing value

There's a ton of cool tech that provides a ton of value and makes little to no money.