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At a private event with a16z investors, among other VCs, I was told: 1. Crypto is primarily preferred due to early liquidity and being able to dump the bags on

At a private event with a16z investors, among other VCs, I was told: 1. Crypto is primarily preferred due to early liquidity and being able to dump the bags on someone else. Old school startup models lock up too much capital. 2. Under the table deals mean that privately (kept a secret) some well known VCs have exited coins long before the ICO

JumpCrisscross 4y ago
I’m increasingly convinced, and thank god, I’m finding similar minds on the Hill and in D.C. broadly, that anyone in leadership in crypto or web3 is perpetuating a scam or an idiot. The former should be prosecuted. The latter, fined under a deferred prosecution agreement.
scifibestfi 4y ago
Told that by whom?
dvt 4y ago
> Old school startup models lock up too much capital. I've gotten in debates here on HN before about this, but a VC's job is literally to multiply capital. Crypto has been extremely good for business (and, more key, for the numbers). I honestly don't see how anyone takes issue with a16z dumping on crypto bros any more than a16z over-funding a startup which, in turn, completely obliterates their competition. Not to mention SPACs that have been doing basically the exact same thing, as well. I have as much sympathy for degenerate crypto gamblers as I did for Citadel Capital.
- JumpCrisscross 4y ago
  > don't see how anyone takes issue with a16z dumping on crypto bros any more than a16z over-funding a startup which, in turn, completely obliterates their competition One of these is securities fraud.
  - dvt 4y ago
    Until Ripple v. SEC is settled, this is hypothetical.
- rileyphone 4y ago
  VCs job is also to maintain a reputation for good investments. Now, founders will rationally devalue investments from a16z lest they be associated with such unsavory company, even if they aren’t crypto-related. Especially if these kinds of party rumors keep going around.
  - dvt 4y ago
    > Now, founders will rationally devalue investments from a16z No, they won't. Non-profits were gladly taking donations from Pablo Escobar, and you're telling me startups are going to say "no" to early funding rounds because a16z is too "unsavory."
- senko 4y ago
  > a VC's job is literally to multiply capital. That's literally everyone's job in investing. You think a pension fund or an ETF serves a different purpose? Venture Capital's job is to do that by providing capital for risky ventures (it's in the name), not by financing pump and dump schemes. > Crypto has been extremely good for business So were subprime mortgages, until the moment they weren't.
  - dvt 4y ago
    > That's literally everyone's job in investing. You think a pension fund or an ETF serves a different purpose? Yeah, if you completely ignore risk profiles. VCs have extremely high risk appetites and comparing them to pension funds is in bad faith.
AlexandrB 4y ago
> 2. Under the table deals mean that privately (kept a secret) some well known VCs have exited coins long before the ICO My understanding was that until the ICO, the coin isn't available for purchase by the public. Who is providing the exit liquidity in a pre-ICO exit?
- ralph84 4y ago
  Presumably the SBFs and CZs of the world, who then use the pre-ICO shitcoins as reserves on their balance sheet.
- deleted 4y ago
  [deleted]
- clpm4j 4y ago
  Less-sophisticated "professional investors" I would imagine.
- moritonal 4y ago
  Imagine a friend tells you they know a way to get in on a coin pre-ICO! You've heard how valuable that is so you're interested, but apparently you have to have a large amount of capital, so you get some friends to join you. You ain't going to miss out on the golden goose!
- yao420 4y ago
  So I think it’s a little more complex. Let’s look at one of AZ16’s blockchains projects. Ava Labs is the company, Avalanche is the blockchain, Avax is the token. https://www.crunchbase.com/organization/ava-labs/ https://www.crunchbase.com/organization/ava-labs/ They launched a series A in 2019. The Series A was $6million and was joined by Andreessen Horowitz (a16z), Initialized Capital and Polychain Capital, in addition to angel investments from Balaji Srinivasan and Naval Ravikant. Two private token sale in June and July 2020 for $12m and $42m. Are the VC’s and insiders getting a cut? Then finally a public ICO in sept 2020 to raise $240 million. They also had a funding round of $350million in April 22. Ample time for early VC’s to make money. It’s valuation is $5billion. That’s the same as Coinbase which is a legit org with billions in revenue.
wpietri 4y ago
This is totally believable and such a disappointment to me. I remember back when Andreessen Horowitz was founded and at the time I thought it was a breath of fresh air among VCs. I even went by their offices and talked with one of their in-house recruiters about some of their portfolio companies. Sad to see them fall so far. I got into computers because I could help people by making software. Since then "value for value" has done a lot to guide how I spend my time. Seeing them and so many others get sucked into anything that makes money, no matter how poisonous, feels like such a loss.
- spamizbad 4y ago
  Carl Icahn called out a16z's dirty dealings almost a decade ago but there was still too much rage and fallout from the financial crisis for him to be taken seriously outside of the realm of finance. VCs were the good guys and the hedge fund managers were the bad guys back then. To me, I am just appalled at how deeply cynical the whole crypto/web3 thing ended up being. I was always bearish on it but I assumed at least the people investing in it were true believers.
  - nradov 4y ago
    Carl Icahn personally accused Marc Andreesen of cheating eBay shareholders when he was on the Board and they sold Skype in 2009. I don't know or care whether the accusations are true but you can read more about it here. Marc Andreessen: 'False and Misleading Accusations' Made Against Me - WSJ https://blogs.wsj.com/moneybeat/2014/03/03/marc-andreessen-false-and-misleading-accusations-made-against-me/ https://blogs.wsj.com/moneybeat/2014/03/03/marc-andreessen-f...
    - specialist 4y ago
      Facebook Conflict-of-Interest Suit Reveals (Hilarious) Coaching Texts Between Mark Zuckerberg and Marc Andreessen [2016] https://nymag.com/intelligencer/2016/12/conflict-of-interest-suit-reveals-zuck-andreessen-texts.html https://nymag.com/intelligencer/2016/12/conflict-of-interest... -- "The NCSA at the University of Illinois claimed that Andreessen and Bina had stolen Mosaic from the university and demanded the product’s name be changed. They were also told to quit distributing their product. Andreessen decided that he would not quit offering the software, but he did agree to change the name to Netscape Communications Corporation. The University of Illinois was not completely satisfied until an agreement was reached on December 21, 1994. The University of Illinois received a financial settlement that cost Netscape around $3 million." Who is Marc Andreessen, Silicon Valley’s Billionaire Kingmaker? [2022] https://history-computer.com/marc-andreessen-complete-biography/ https://history-computer.com/marc-andreessen-complete-biogra... -- I'm sensing a pattern.

JumpCrisscross 4y ago

I’m increasingly convinced, and thank god, I’m finding similar minds on the Hill and in D.C. broadly, that anyone in leadership in crypto or web3 is perpetuating a scam or an idiot. The former should be prosecuted. The latter, fined under a deferred prosecution agreement.

scifibestfi 4y ago

Told that by whom?

dvt 4y ago

> Old school startup models lock up too much capital. I've gotten in debates here on HN before about this, but a VC's job is literally to multiply capital. Crypto has been extremely good for business (and, more key, for the numbers). I honestly don't see how anyone takes issue with a16z dumping on crypto bros any more than a16z over-funding a startup which, in turn, completely obliterates their competition. Not to mention SPACs that have been doing basically the exact same thing, as well. I have as much sympathy for degenerate crypto gamblers as I did for Citadel Capital.

JumpCrisscross 4y ago
> don't see how anyone takes issue with a16z dumping on crypto bros any more than a16z over-funding a startup which, in turn, completely obliterates their competition One of these is securities fraud.
- dvt 4y ago
  Until Ripple v. SEC is settled, this is hypothetical.
rileyphone 4y ago
VCs job is also to maintain a reputation for good investments. Now, founders will rationally devalue investments from a16z lest they be associated with such unsavory company, even if they aren’t crypto-related. Especially if these kinds of party rumors keep going around.
- dvt 4y ago
  > Now, founders will rationally devalue investments from a16z No, they won't. Non-profits were gladly taking donations from Pablo Escobar, and you're telling me startups are going to say "no" to early funding rounds because a16z is too "unsavory."
senko 4y ago
> a VC's job is literally to multiply capital. That's literally everyone's job in investing. You think a pension fund or an ETF serves a different purpose? Venture Capital's job is to do that by providing capital for risky ventures (it's in the name), not by financing pump and dump schemes. > Crypto has been extremely good for business So were subprime mortgages, until the moment they weren't.
- dvt 4y ago
  > That's literally everyone's job in investing. You think a pension fund or an ETF serves a different purpose? Yeah, if you completely ignore risk profiles. VCs have extremely high risk appetites and comparing them to pension funds is in bad faith.

AlexandrB 4y ago

> 2. Under the table deals mean that privately (kept a secret) some well known VCs have exited coins long before the ICO My understanding was that until the ICO, the coin isn't available for purchase by the public. Who is providing the exit liquidity in a pre-ICO exit?

ralph84 4y ago
Presumably the SBFs and CZs of the world, who then use the pre-ICO shitcoins as reserves on their balance sheet.
deleted 4y ago
[deleted]
clpm4j 4y ago
Less-sophisticated "professional investors" I would imagine.
moritonal 4y ago
Imagine a friend tells you they know a way to get in on a coin pre-ICO! You've heard how valuable that is so you're interested, but apparently you have to have a large amount of capital, so you get some friends to join you. You ain't going to miss out on the golden goose!
yao420 4y ago
So I think it’s a little more complex. Let’s look at one of AZ16’s blockchains projects. Ava Labs is the company, Avalanche is the blockchain, Avax is the token. https://www.crunchbase.com/organization/ava-labs/ https://www.crunchbase.com/organization/ava-labs/ They launched a series A in 2019. The Series A was $6million and was joined by Andreessen Horowitz (a16z), Initialized Capital and Polychain Capital, in addition to angel investments from Balaji Srinivasan and Naval Ravikant. Two private token sale in June and July 2020 for $12m and $42m. Are the VC’s and insiders getting a cut? Then finally a public ICO in sept 2020 to raise $240 million. They also had a funding round of $350million in April 22. Ample time for early VC’s to make money. It’s valuation is $5billion. That’s the same as Coinbase which is a legit org with billions in revenue.

wpietri 4y ago

This is totally believable and such a disappointment to me. I remember back when Andreessen Horowitz was founded and at the time I thought it was a breath of fresh air among VCs. I even went by their offices and talked with one of their in-house recruiters about some of their portfolio companies. Sad to see them fall so far. I got into computers because I could help people by making software. Since then "value for value" has done a lot to guide how I spend my time. Seeing them and so many others get sucked into anything that makes money, no matter how poisonous, feels like such a loss.

spamizbad 4y ago
Carl Icahn called out a16z's dirty dealings almost a decade ago but there was still too much rage and fallout from the financial crisis for him to be taken seriously outside of the realm of finance. VCs were the good guys and the hedge fund managers were the bad guys back then. To me, I am just appalled at how deeply cynical the whole crypto/web3 thing ended up being. I was always bearish on it but I assumed at least the people investing in it were true believers.
- nradov 4y ago
  Carl Icahn personally accused Marc Andreesen of cheating eBay shareholders when he was on the Board and they sold Skype in 2009. I don't know or care whether the accusations are true but you can read more about it here. Marc Andreessen: 'False and Misleading Accusations' Made Against Me - WSJ https://blogs.wsj.com/moneybeat/2014/03/03/marc-andreessen-false-and-misleading-accusations-made-against-me/ https://blogs.wsj.com/moneybeat/2014/03/03/marc-andreessen-f...
  - specialist 4y ago
    Facebook Conflict-of-Interest Suit Reveals (Hilarious) Coaching Texts Between Mark Zuckerberg and Marc Andreessen [2016] https://nymag.com/intelligencer/2016/12/conflict-of-interest-suit-reveals-zuck-andreessen-texts.html https://nymag.com/intelligencer/2016/12/conflict-of-interest... -- "The NCSA at the University of Illinois claimed that Andreessen and Bina had stolen Mosaic from the university and demanded the product’s name be changed. They were also told to quit distributing their product. Andreessen decided that he would not quit offering the software, but he did agree to change the name to Netscape Communications Corporation. The University of Illinois was not completely satisfied until an agreement was reached on December 21, 1994. The University of Illinois received a financial settlement that cost Netscape around $3 million." Who is Marc Andreessen, Silicon Valley’s Billionaire Kingmaker? [2022] https://history-computer.com/marc-andreessen-complete-biography/ https://history-computer.com/marc-andreessen-complete-biogra... -- I'm sensing a pattern.