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Very unreasonable. Large firms like Sequoia, Blackrock, Softbank invested and sports teams like Miami Heat or Mercedes F1 actually advertised them.

dragontamer 4y ago
Venture Capitalists are free to invest in whatever they want. That doesn't mean its a good buy, it means that those guys are willing to put down some risky bets (probably because they have hundreds-of-billions or even trillions in assets, and can weather any losses). > sports teams like Miami Heat or Mercedes F1 actually advertised them How does that prove any kind of reliability at all? There's no FDIC insurance on any of the deposits. There's no actual regulation or transparency. Its not like VMFXX or SWVXX where there are requirements to publish their assets on a regular basis, or describe asset flows / liquidity requirements. -------- Still though, the scientists in this discussion were _NOT_ investors. The economy is designed for _investors_ to win (and lose) money as per appropriate risks. Its fine for investors to lose money here, that's the entire point of capitalism. (The investors get the money if they bet right, but they lose their money if they lose). These scientists who allegedly got funds... its not their job to be trying to figure out which groups to trust or not trust. Maybe scientific donations / 401c type deals need to be more carefully watched in the future?
- zone411 4y ago
  > How does that prove any kind of reliability at all? There's no FDIC insurance on any of the deposits. There's no actual regulation or transparency. Its not like VMFXX or SWVXX where there are requirements to publish their assets on a regular basis, or describe asset flows / liquidity requirements. The point is that these companies with way more financial experience, size, and more reasons to investigate failed to find any warning signs, so these non-profits had very little chance, even if they didn't go with the "don't look a gift horse in the mouth" approach. FTX might have let some auditor from an investor putting in $100M take a look at their books but they'd almost surely tell a non-profit with no leverage that's receiving the money to get lost if they asked.
  - dragontamer 4y ago
    > The point is that these companies with way more financial experience, size, more reasons to investigate failed to find any warning signs I don't think you get the point of Softbank or even Blackrock. When you have $10 Trillion in assets like Blackrock, you _DON'T_ sweat a $300 million investment or even a $2 billion investment here or there. It literally doesn't matter. Its not even a rounding error to you, your company, or your investors. Its barely worth Blackrock's time to seriously look at things like this. That's why we get $Billion sized London Whale mistakes or whatever, because they have so much money to manage the only reasonable way to do it is to hand billions of (management) dollars to executives and give those executives broad leeway to do whatever they want. ------- This kind of mistake is a "Lol, Executive #455 made an error", and that executive is going to be in the hotseat as other executives make fun of him for his FTX mistake at a place like Blackrock. I don't understand where you get this idea that VC companies tightly vet their choices. If anything, the bigger the VC firm, the less they vet something at the $million, or even $billion levels.
- polygamous_bat 4y ago
  > Venture Capitalists are free to invest in whatever they want. That is clearly and demonstrably false. Just because you have investments in Lockheed Martin doesn't mean you are free to invest in Al Qaeda to increase the chances of conflict.
deleted 4y ago
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tshaddox 4y ago
I'm not sure I follow the argument. It seems entirely possible that large firms invested in FTX because they had information that indicated that it would be a lucrative investment and that it would be unwise for non-profits to rely heavily on FTX donations. Those two things seem barely related. Why would the leadership of a non-profit see that Sequoia is investing in FTX and conclude that therefore it's reasonable to reorganize the non-profit to rely heavily on FTX?
kuramitropolis 4y ago
>sports teams like Miami Heat or Mercedes F1 actually advertised them. Also stadium sponsorships. If you're trying to buy credibility by sponsoring spectator sports, well that's a huge red flag right there.

dragontamer 4y ago

Venture Capitalists are free to invest in whatever they want. That doesn't mean its a good buy, it means that those guys are willing to put down some risky bets (probably because they have hundreds-of-billions or even trillions in assets, and can weather any losses). > sports teams like Miami Heat or Mercedes F1 actually advertised them How does that prove any kind of reliability at all? There's no FDIC insurance on any of the deposits. There's no actual regulation or transparency. Its not like VMFXX or SWVXX where there are requirements to publish their assets on a regular basis, or describe asset flows / liquidity requirements. -------- Still though, the scientists in this discussion were _NOT_ investors. The economy is designed for _investors_ to win (and lose) money as per appropriate risks. Its fine for investors to lose money here, that's the entire point of capitalism. (The investors get the money if they bet right, but they lose their money if they lose). These scientists who allegedly got funds... its not their job to be trying to figure out which groups to trust or not trust. Maybe scientific donations / 401c type deals need to be more carefully watched in the future?

zone411 4y ago
> How does that prove any kind of reliability at all? There's no FDIC insurance on any of the deposits. There's no actual regulation or transparency. Its not like VMFXX or SWVXX where there are requirements to publish their assets on a regular basis, or describe asset flows / liquidity requirements. The point is that these companies with way more financial experience, size, and more reasons to investigate failed to find any warning signs, so these non-profits had very little chance, even if they didn't go with the "don't look a gift horse in the mouth" approach. FTX might have let some auditor from an investor putting in $100M take a look at their books but they'd almost surely tell a non-profit with no leverage that's receiving the money to get lost if they asked.
- dragontamer 4y ago
  > The point is that these companies with way more financial experience, size, more reasons to investigate failed to find any warning signs I don't think you get the point of Softbank or even Blackrock. When you have $10 Trillion in assets like Blackrock, you _DON'T_ sweat a $300 million investment or even a $2 billion investment here or there. It literally doesn't matter. Its not even a rounding error to you, your company, or your investors. Its barely worth Blackrock's time to seriously look at things like this. That's why we get $Billion sized London Whale mistakes or whatever, because they have so much money to manage the only reasonable way to do it is to hand billions of (management) dollars to executives and give those executives broad leeway to do whatever they want. ------- This kind of mistake is a "Lol, Executive #455 made an error", and that executive is going to be in the hotseat as other executives make fun of him for his FTX mistake at a place like Blackrock. I don't understand where you get this idea that VC companies tightly vet their choices. If anything, the bigger the VC firm, the less they vet something at the $million, or even $billion levels.
polygamous_bat 4y ago
> Venture Capitalists are free to invest in whatever they want. That is clearly and demonstrably false. Just because you have investments in Lockheed Martin doesn't mean you are free to invest in Al Qaeda to increase the chances of conflict.

deleted 4y ago

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tshaddox 4y ago

I'm not sure I follow the argument. It seems entirely possible that large firms invested in FTX because they had information that indicated that it would be a lucrative investment and that it would be unwise for non-profits to rely heavily on FTX donations. Those two things seem barely related. Why would the leadership of a non-profit see that Sequoia is investing in FTX and conclude that therefore it's reasonable to reorganize the non-profit to rely heavily on FTX?

kuramitropolis 4y ago

>sports teams like Miami Heat or Mercedes F1 actually advertised them. Also stadium sponsorships. If you're trying to buy credibility by sponsoring spectator sports, well that's a huge red flag right there.