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How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Ca

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one do _any_ due diligence?? Did they just trust the auditor Armanino and Prager Metis (who??)[1]?? At least Enron had Arthur Andersen and some cover of respectability in the audit space at the time. Irrational exuberance is really something. 1- https://www.coindesk.com/business/2022/11/11/meet-the-metaverse-night-clubloving-audit-firm-that-presided-over-ftxs-financials/ https://www.coindesk.com/business/2022/11/11/meet-the-metave...

ourmandave 4y ago
Makes you wonder who else in the crypto space is lying through their freakin' teeth, don't it?
- ttul 4y ago
  Any time a company tells you you can’t have a board seat… it’s time to run.
- cyanydeez 4y ago
  Unless it's code, all of them
ttul 4y ago
My guess is that either FTX did not furnish them with accurate or truthful information, or the information was correct at the time, but the lack of good governance allowed FTX to pursue some rotten strategies without the knowledge of their investors. It would not be the first time that otherwise smart people have made a bad call.
- celestialcheese 4y ago
  The timing of the big investments back in Oct '21 for their Series B and Jan '22 for Series C makes your guess seem likely. Seems like most of the actual fraud started after the 3AC/TerraLuna blowup as SBF trying to trade out of the hole he was in.
  - onphonenow 4y ago
    I’m slightly curious if Sam had a personal relationship with someone at alameda? He took a pretty straightforward way to make money (charge fees running an exchange) and then looks to have dumped money into an absolute black whole of illiquidity and stupidity at alameda which was run by Caroline ? Even if alameda was making smart seed round investments- the liquidity horizons make no sense for an exchange to be part of that! I can imagine alameda being burnt by 3ac - just wrap things up there if needed?
    - mkl 4y ago
      That seems to be known: "Alameda CEO Caroline Ellison, whose firm played a central role in the company’s collapse – and who, at times, has dated Bankman-Fried" - https://fortune.com/2022/11/11/sam-bankman-fried-crypto-empire-ftx-alameda-run-gang-kids-bahamas-who-all-dated-each-other/ https://fortune.com/2022/11/11/sam-bankman-fried-crypto-empi...
    - cplusplusfellow 4y ago
      He lived with the CEO of Alameda and is said to be in a polyamorous relationship with her. He’s also co-CEO.
      - onphonenow 4y ago
        Yowk! Well - that might explain some of the craziness!
  - nullc 4y ago
    > Seems like most of the actual fraud started after the 3AC/TerraLuna blowup What makes you say that? I think it was fraud from day one-- starting with the claimed billions of dollars in arb gains. If they were real-- wheres that money now?
belter 4y ago
"It's A BIG Club & You Ain't In It!" - https://youtu.be/Nyvxt1svxso https://youtu.be/Nyvxt1svxso
dralley 4y ago
>SoftBank Well, it's not like they have a great track record with risk management.
smt88 4y ago
We all asked the same quesrions after Theranos. Silicon Valley VC is a relationship business run by idiots who just follow the leader. They admitted they didn't do much diligence into Theranos, and they obviously didn't do it here either.
- deleted 4y ago
  [deleted]
- FerociousTimes 4y ago
  Yeah you're right, FOMO and the bandwagon effect are at play here.
rasz 4y ago
>Jesus. Did no one do _any_ due diligence?? They did, saw mommy, daddy, family connections and went all in. Edit: forgot about girlfriend "Gary Gensler's boss at MIT Glenn Ellison is the father of the Co-CEO Caroline Ellison"
teg4n_ 4y ago
Why do due diligence when the CEO plays League of Legends during meetings and that is supposed to make him a super genius.
airza 4y ago
I feel like making money when you can borrow money at near zero interest rates is a pretty easy thing that more or less anyone can do.
memish 4y ago
Appeal to authority is a hell of a drug. "I'm a big advocate for Sam because he has two parents that are compliance lawyers. If there's ever a place I can be where I'm not going to get in trouble, it's gonna be FTX" https://twitter.com/Guruleaks1/status/1591086077489844224 https://twitter.com/Guruleaks1/status/1591086077489844224
- lotsofpulp 4y ago
  Or maybe that guy was spouting nonsense because he was betting he can pawn off his ownership stake onto someone else for a gain.
ilrwbwrkhv 4y ago
Because they are all dumb and dumbers. Having spoken to a lot of high profile vc firms you would be amazed how low IQ most of them are. They have this outward show which they cultivate while they spend old people's pension funds.
factsarelolz 4y ago
It's fun to gamble and light money on fire. Sometimes that gambling pays off and you get to light even more on fire. Retail traders will always gladly sweep up the ashes and hold on to them.
fullsend 4y ago
The words of Andrew Lahde (who closed his hedge fund up 800% after betting against investment banks in 2008) continue to be not just insightful but downright educational. "I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America." The lesson is that just because you work for a16z, or Goldman Sachs, or McKinsey, doesn’t mean anything. In fact you’re probably more dumb than average because you’ve been trained to see things a certain way. Not only are they not our best and brightest, they are in fact the “low hanging fruit”.
- greenyoda 4y ago
  The rest of Lahde's goodbye letter is also interesting, and can be found here in its entirety: https://web.archive.org/web/20081019183111/http://ftalphaville.ft.com/blog/2008/10/17/17194/andrew-lahde-bows-out-in-style/ https://web.archive.org/web/20081019183111/http://ftalphavil...

ourmandave 4y ago

Makes you wonder who else in the crypto space is lying through their freakin' teeth, don't it?

ttul 4y ago
Any time a company tells you you can’t have a board seat… it’s time to run.
cyanydeez 4y ago
Unless it's code, all of them

ttul 4y ago

My guess is that either FTX did not furnish them with accurate or truthful information, or the information was correct at the time, but the lack of good governance allowed FTX to pursue some rotten strategies without the knowledge of their investors. It would not be the first time that otherwise smart people have made a bad call.

celestialcheese 4y ago
The timing of the big investments back in Oct '21 for their Series B and Jan '22 for Series C makes your guess seem likely. Seems like most of the actual fraud started after the 3AC/TerraLuna blowup as SBF trying to trade out of the hole he was in.
- onphonenow 4y ago
  I’m slightly curious if Sam had a personal relationship with someone at alameda? He took a pretty straightforward way to make money (charge fees running an exchange) and then looks to have dumped money into an absolute black whole of illiquidity and stupidity at alameda which was run by Caroline ? Even if alameda was making smart seed round investments- the liquidity horizons make no sense for an exchange to be part of that! I can imagine alameda being burnt by 3ac - just wrap things up there if needed?
  - mkl 4y ago
    That seems to be known: "Alameda CEO Caroline Ellison, whose firm played a central role in the company’s collapse – and who, at times, has dated Bankman-Fried" - https://fortune.com/2022/11/11/sam-bankman-fried-crypto-empire-ftx-alameda-run-gang-kids-bahamas-who-all-dated-each-other/ https://fortune.com/2022/11/11/sam-bankman-fried-crypto-empi...
  - cplusplusfellow 4y ago
    He lived with the CEO of Alameda and is said to be in a polyamorous relationship with her. He’s also co-CEO.
    - onphonenow 4y ago
      Yowk! Well - that might explain some of the craziness!
- nullc 4y ago
  > Seems like most of the actual fraud started after the 3AC/TerraLuna blowup What makes you say that? I think it was fraud from day one-- starting with the claimed billions of dollars in arb gains. If they were real-- wheres that money now?

belter 4y ago

"It's A BIG Club & You Ain't In It!" - https://youtu.be/Nyvxt1svxso https://youtu.be/Nyvxt1svxso

dralley 4y ago

>SoftBank Well, it's not like they have a great track record with risk management.

smt88 4y ago

We all asked the same quesrions after Theranos. Silicon Valley VC is a relationship business run by idiots who just follow the leader. They admitted they didn't do much diligence into Theranos, and they obviously didn't do it here either.

deleted 4y ago
[deleted]
FerociousTimes 4y ago
Yeah you're right, FOMO and the bandwagon effect are at play here.

rasz 4y ago

>Jesus. Did no one do _any_ due diligence?? They did, saw mommy, daddy, family connections and went all in. Edit: forgot about girlfriend "Gary Gensler's boss at MIT Glenn Ellison is the father of the Co-CEO Caroline Ellison"

teg4n_ 4y ago

Why do due diligence when the CEO plays League of Legends during meetings and that is supposed to make him a super genius.

airza 4y ago

I feel like making money when you can borrow money at near zero interest rates is a pretty easy thing that more or less anyone can do.

memish 4y ago

Appeal to authority is a hell of a drug. "I'm a big advocate for Sam because he has two parents that are compliance lawyers. If there's ever a place I can be where I'm not going to get in trouble, it's gonna be FTX" https://twitter.com/Guruleaks1/status/1591086077489844224 https://twitter.com/Guruleaks1/status/1591086077489844224

lotsofpulp 4y ago
Or maybe that guy was spouting nonsense because he was betting he can pawn off his ownership stake onto someone else for a gain.

ilrwbwrkhv 4y ago

Because they are all dumb and dumbers. Having spoken to a lot of high profile vc firms you would be amazed how low IQ most of them are. They have this outward show which they cultivate while they spend old people's pension funds.

factsarelolz 4y ago

It's fun to gamble and light money on fire. Sometimes that gambling pays off and you get to light even more on fire. Retail traders will always gladly sweep up the ashes and hold on to them.

fullsend 4y ago

The words of Andrew Lahde (who closed his hedge fund up 800% after betting against investment banks in 2008) continue to be not just insightful but downright educational. "I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America." The lesson is that just because you work for a16z, or Goldman Sachs, or McKinsey, doesn’t mean anything. In fact you’re probably more dumb than average because you’ve been trained to see things a certain way. Not only are they not our best and brightest, they are in fact the “low hanging fruit”.

greenyoda 4y ago
The rest of Lahde's goodbye letter is also interesting, and can be found here in its entirety: https://web.archive.org/web/20081019183111/http://ftalphaville.ft.com/blog/2008/10/17/17194/andrew-lahde-bows-out-in-style/ https://web.archive.org/web/20081019183111/http://ftalphavil...