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> How did they possibly win over investors? Low interest rates have shifted massive amounts of capital to vc. We’re talking trillions possibly, including sover

> How did they possibly win over investors? Low interest rates have shifted massive amounts of capital to vc. We’re talking trillions possibly, including sovereign funds and ultrabillionaire family offices. Are those wealth and investment managers nuts? Maybe, but I’ve concluded the most likely explanation is that they know exactly how to play the vc game: place a number of wild bets and hope that one in a hundred pays off. They sometimes seem to barely do due diligence, perhaps for efficiency and speed in allocation, and because the vc portion of their otherwise well-diversified portfolio is tiny. You and I get to partake in the schadenfreude if these stupid ventures collapse but they’re wiping their tears with the returns they make on other asset classes - stocks back then, fixed income now, etc. If interest rates go back to the “old normal” for a sustained period of time then maybe this ends, but maybe the new normal is here to stay. We’ve been told there’d be a big cleanse of stupid or otherwise unprofitable ideas (can we really cram more SaaS solutions into every single niche under the sun?) but I’m seeing very little of the sort, other than layoffs and downsizings which are not thus far commensurate with the fireworks we were promised.

smallerfish 4y ago
It's true, but the raise _just happened_, which means there's still loose VC money out there. The narrative has been that there's been a transition to more conservative funding...apparently not in this case, at least.
- junofan 4y ago
  There’s usually a lag… raise might’ve happened >1 year ago.
michaelt 4y ago
> the most likely explanation is that they know exactly how to play the vc game: place a number of wild bets and hope that one in a hundred pays off. But isn't a key point of this theory of investing that you invest in many companies that have a 1% chance of making a 100x return - rather than investing in companies with a 0% chance?
- arcturus17 4y ago
  Paid composting collection sounds like a ridiculous idea but if for example they manage to become a standard and get monopolistic contracts like waste management companies, on a national level… there’s your moonshot. Here, have a hundred mill.

smallerfish 4y ago

It's true, but the raise _just happened_, which means there's still loose VC money out there. The narrative has been that there's been a transition to more conservative funding...apparently not in this case, at least.

junofan 4y ago
There’s usually a lag… raise might’ve happened >1 year ago.

michaelt 4y ago

> the most likely explanation is that they know exactly how to play the vc game: place a number of wild bets and hope that one in a hundred pays off. But isn't a key point of this theory of investing that you invest in many companies that have a 1% chance of making a 100x return - rather than investing in companies with a 0% chance?

arcturus17 4y ago
Paid composting collection sounds like a ridiculous idea but if for example they manage to become a standard and get monopolistic contracts like waste management companies, on a national level… there’s your moonshot. Here, have a hundred mill.