4 ms·

In reality, the public has just woken up to the fact that VCs were dumping bags of shit on them at absurdly inflated valuations, and that many of these bags of

by hodder 7y ago

In reality, the public has just woken up to the fact that VCs were dumping bags of shit on them at absurdly inflated valuations, and that many of these bags of shit are destined for bankruptcy due to cash burn - they are commonly outright frauds designed to siphon cash from the uneducated public investor class to enrich VCs and founders. Fuck greedy VCs if they want to dump their money into frauds and flip it onto the public. Fuck these criminals to hell. I hope they go bankrupt if they don't figure out that that is the real shit going on here. VCs: Quit whining about the public using their brains to avoid your fucking scams.

ghaff 7y ago
From where I sit, it looks like, at least this time round, the general public is pretty well tuned into the flea-ridden dogs that VCs and other investment funds are trying to dump onto the public markets. So a bunch of these SV darlings crash and burn. To a first approximation, no one cares and it seems a useful lesson at the end of the day.
- hodder 7y ago
  Exactly. The public is waking up and VCs are stuck holding the bags of shit. Good. Fuck them for trying to pull the wool over the eyes of the public to get rich. They deserve what they are getting.
  - networkimprov 7y ago
    The Theory of the Greater Fool operates in most asset markets, not only publicly traded securities. And "the public" wields it as often as any private asset manager.
    - pessimizer 7y ago
      It's not foolish to be an early investor in a promisingly marketed multilevel marketing scam. The greater fool is the very late investor, who is as far from quality information that would allow them to make a good decision about the buy as they could possibly be. So calling them fools is unfair; they're the target of a bunch of misinformation and hype which was the actual product that the initial investors were betting on.
  - TheFullStack 7y ago
    Completely agree. In a just world, we would also name names. I want everyone to know exactly who is pulling the scams.
  - nostromo 7y ago
    I don't get the acrimony. Nobody is being fraudulent here. Everyone knows Uber is burning cash and is highly unprofitable. If that appeals to you, go ahead and invest, if not, don't. Sure, I'm not shedding a tear for Softbank. But I'm also not pissed at them for... subsidizing my Uber rides using Saudi wealth for the past few years.
    - Analemma_ 7y ago
      That's not quite true. There is very strong social pressure in the startup scene to never question the hype machine. Remember when the Wall Street Journal first broke the news that Theranos was a scam, how VC Twitter condemned it as media jealousy and got TechCrunch to write hagiographies of Elizabeth Holmes? And then there was David Palmer pointing out what went wrong with AltSchool and everyone in VC rushing to jump down his throat [0]. This all reeks of people with shaky investments trying to contain and destroy bad news so they can dump the bag on the public. [0]: https://www.nytimes.com/2019/09/10/style/oh-behave.html https://www.nytimes.com/2019/09/10/style/oh-behave.html
prostoalex 7y ago
Considering that early IPO trading is fairly limited due to lockup, and IPO process itself restricted to high-net-worth clients (index funds normally don't participate until much later), I'd say that public markets provide a fairly efficient price discovery mechanism. It's quite rational for VCs to extract maximum value for themselves and their clients, and similarly rational for IPO buyers to push back on proposed valuations.
- Analemma_ 7y ago
  There are some pension funds which have VC exposure though. This is the one that really steams me, because when pension funds go bust the taxpayer is legally required to pick up the tab. We're literally paying for VCs' lies.
  - prostoalex 7y ago
    But those pension would've been exposed at previous rounds' price, not the IPO price. An aggressively priced IPO gone bad will likely still net them a positive ROI.
buboard 7y ago
> I hope they go bankrupt Ironically, the public would pay for them again
- harryh 7y ago
  VCs? No. Definitely not.
drawkbox 7y ago
The rise of private equity siphoning off all gains before they dump it on the public, is breaking the public markets and skimming from all investors. The idea of public markets was trusted investments and the ability to gain with early companies. Now those gains go to the early private investors, then they shine that turd after the growth is tapped to sucker the public market longs into giving them more runway. Usually once the growth is tapped out they now dump it on the public markets. But the system still works a bit, public markets and SEC requirements expose fraud and overvaluations. When the whole of America revolves around the public markets, and so many forces out there trying to break them like private equity shovel companies, naked short selling, short and distort via large hedge funds, planned volatility and more. I wonder when the public markets will break, because that is when America breaks as well. You'd think the SEC would step in more. They are a bit on short and distort [1] and did on naked short selling after the Great Recession (3 day after the Sept 15th cliff) [2]. All of those forces are back with a vengeance. [1] https://www.sec.gov/news/press-release/2018-190 https://www.sec.gov/news/press-release/2018-190 [2] https://www.sec.gov/news/press/2008/2008-204.htm https://www.sec.gov/news/press/2008/2008-204.htm
- AznHisoka 7y ago
  "Usually once the growth is tapped out they now dump it on the public markets." While this has been true for recent IPOs like Uber/Lyft/WeWork, there also has been many other IPOs where the companies have continued growing even after they IPO. Recent examples include Twilio, Hubspot, Docusign and Tableau.
conanbatt 7y ago
The idea is very compelling but..public markets are not dumb markets, they are insanely competitive and liquid. IPO'ing is by no means a guarantee of success. The only ones that are actually dumb are index funds, and they are huge, but not enough of a force to make a bad company into an easy sell.

by hodder 7y ago

ghaff 7y ago

From where I sit, it looks like, at least this time round, the general public is pretty well tuned into the flea-ridden dogs that VCs and other investment funds are trying to dump onto the public markets. So a bunch of these SV darlings crash and burn. To a first approximation, no one cares and it seems a useful lesson at the end of the day.

hodder 7y ago
Exactly. The public is waking up and VCs are stuck holding the bags of shit. Good. Fuck them for trying to pull the wool over the eyes of the public to get rich. They deserve what they are getting.
- networkimprov 7y ago
  The Theory of the Greater Fool operates in most asset markets, not only publicly traded securities. And "the public" wields it as often as any private asset manager.
  - pessimizer 7y ago
    It's not foolish to be an early investor in a promisingly marketed multilevel marketing scam. The greater fool is the very late investor, who is as far from quality information that would allow them to make a good decision about the buy as they could possibly be. So calling them fools is unfair; they're the target of a bunch of misinformation and hype which was the actual product that the initial investors were betting on.
- TheFullStack 7y ago
  Completely agree. In a just world, we would also name names. I want everyone to know exactly who is pulling the scams.
- nostromo 7y ago
  I don't get the acrimony. Nobody is being fraudulent here. Everyone knows Uber is burning cash and is highly unprofitable. If that appeals to you, go ahead and invest, if not, don't. Sure, I'm not shedding a tear for Softbank. But I'm also not pissed at them for... subsidizing my Uber rides using Saudi wealth for the past few years.
  - Analemma_ 7y ago
    That's not quite true. There is very strong social pressure in the startup scene to never question the hype machine. Remember when the Wall Street Journal first broke the news that Theranos was a scam, how VC Twitter condemned it as media jealousy and got TechCrunch to write hagiographies of Elizabeth Holmes? And then there was David Palmer pointing out what went wrong with AltSchool and everyone in VC rushing to jump down his throat [0]. This all reeks of people with shaky investments trying to contain and destroy bad news so they can dump the bag on the public. [0]: https://www.nytimes.com/2019/09/10/style/oh-behave.html https://www.nytimes.com/2019/09/10/style/oh-behave.html

prostoalex 7y ago

Considering that early IPO trading is fairly limited due to lockup, and IPO process itself restricted to high-net-worth clients (index funds normally don't participate until much later), I'd say that public markets provide a fairly efficient price discovery mechanism. It's quite rational for VCs to extract maximum value for themselves and their clients, and similarly rational for IPO buyers to push back on proposed valuations.

Analemma_ 7y ago
There are some pension funds which have VC exposure though. This is the one that really steams me, because when pension funds go bust the taxpayer is legally required to pick up the tab. We're literally paying for VCs' lies.
- prostoalex 7y ago
  But those pension would've been exposed at previous rounds' price, not the IPO price. An aggressively priced IPO gone bad will likely still net them a positive ROI.

buboard 7y ago

> I hope they go bankrupt Ironically, the public would pay for them again

harryh 7y ago
VCs? No. Definitely not.

drawkbox 7y ago

The rise of private equity siphoning off all gains before they dump it on the public, is breaking the public markets and skimming from all investors. The idea of public markets was trusted investments and the ability to gain with early companies. Now those gains go to the early private investors, then they shine that turd after the growth is tapped to sucker the public market longs into giving them more runway. Usually once the growth is tapped out they now dump it on the public markets. But the system still works a bit, public markets and SEC requirements expose fraud and overvaluations. When the whole of America revolves around the public markets, and so many forces out there trying to break them like private equity shovel companies, naked short selling, short and distort via large hedge funds, planned volatility and more. I wonder when the public markets will break, because that is when America breaks as well. You'd think the SEC would step in more. They are a bit on short and distort [1] and did on naked short selling after the Great Recession (3 day after the Sept 15th cliff) [2]. All of those forces are back with a vengeance. [1] https://www.sec.gov/news/press-release/2018-190 https://www.sec.gov/news/press-release/2018-190 [2] https://www.sec.gov/news/press/2008/2008-204.htm https://www.sec.gov/news/press/2008/2008-204.htm

AznHisoka 7y ago
"Usually once the growth is tapped out they now dump it on the public markets." While this has been true for recent IPOs like Uber/Lyft/WeWork, there also has been many other IPOs where the companies have continued growing even after they IPO. Recent examples include Twilio, Hubspot, Docusign and Tableau.

conanbatt 7y ago

The idea is very compelling but..public markets are not dumb markets, they are insanely competitive and liquid. IPO'ing is by no means a guarantee of success. The only ones that are actually dumb are index funds, and they are huge, but not enough of a force to make a bad company into an easy sell.