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I am not talking about individual VCs, but in general, all of them, their collective role is to protect money (from their clients) from potential disruptive inn
by stephc_int13 5y ago
I am not talking about individual VCs, but in general, all of them, their collective role is to protect money (from their clients) from potential disruptive innovation.
The goal is not to create value or even to make money, but to not lose it.
- mbesto 5y ago> but to not lose it. But for who? You keep saying "from their clients", but I don't think you understand how the VC model works or care to explain what you mean by "protect". Here's an example: The California State Teacher's Retirement System, or CalSTRS (called an LP) committed money into Shashta Ventures. Shasta ventures then invested in several Series A and Series B startups (presumably "disruptive innovation"). Sashta then profits from selling those companies and takes a part of that profit for themselves and gives another part to CalSTRS. So. No, they're not "protecting it from their clients". VCs clients are their LPs and their goal is purely to profit from M&A/IPO activity and return that for themselves and their LPs. There isn't any dirty little secret about the industry - its that simple.
- stephc_int13 5y agoThis is not a secret but a common misunderstanding about alignment. VCs (and their clients) are aligned against innovation, contrary to what we might read naïvely. They are investing in "innovative" companies to protect their money against the innovation and also to control them.
- mbesto 5y agoProviding no evidence nor having experience in this area for why this is the case other than repeating the same thing over and over again isn't a very compelling argument. For the record, I'm an angel investor and work with VCs. What you're saying makes no sense to me.
- stephc_int13 5y agoI rest my case.