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Yes, I believe this conspiracy theory too. All of the vcs are double dipping, they own a ton of real estate in sf and invest in sf based companies because they
by brigadier132 3y ago
Yes, I believe this conspiracy theory too. All of the vcs are double dipping, they own a ton of real estate in sf and invest in sf based companies because they know they get the money back through rent
- refulgentis 3y agoIt does seem unlikely the SF VC exists due to SF real estate, interesting theory though, I'm all ears.
- brigadier132 3y agoI mean, you are adding more to my claim by stating it "exists due to SF real estate". I never said that's the only reason it exists, but you know what, that might be the only reason it's so hyper localized to one place. Let's look at the incentives: Pretend you are a wealthy VC with tens of millions invested in San Francisco real estate. You have been given billions by LPs to manage. If I, as the person that has control over how this money can be distributed, only invest those billions in the bay area and bring all these high skilled workers to this one place I can actually impact the price of real estate and triple the tens of millions I already have invested. Once those high skill workers move here they will remain, even after the initial startup goes under because they will move to a different startup. Now if all the VCs are doing this and they all control large multi billion dollar funds...
- jack_riminton 3y agoVC's investing in real estate, that a new one. Care to share any data or sources on that?
- edu 3y agoAny good investor will diversify their investments, so maybe the funds themselves are not investing in real date but the investors of the funds and probably the managers do it.
- api 3y agoMore likely that their LPs are the ones investing in both.
- voisin 3y agoAnd GPs would risk their promotes on their investment returns to benefit their LPs unrelated investments? Give your head a shake…
- brigadier132 3y agoThe fund isn't doing the investing in real estate, the individuals controlling the funds are. Anyway, that's why I said it's a conspiracy theory but the incentives line up like I mentioned in another comment. But it's a conspiracy theory that doesn't even require a explicit coordination, just people acting in their own self interest.
- voisin 3y agoIf you argue that WFH improves productivity why would they risk their company investment returns in favour of their real estate returns?
- uni_rule 3y agoBecause that would involve these people caring about their "boots on the ground" or thinking in the long term. Those two things to happen less and less as things scale up and become public respectively.
- smarmgoblin 3y agoI think they realize the truth which is that productive people can be productive anywhere. Do they care about the toll a 2-hour commute takes on the workers or how that translates into deliverables and timelines? Ask yourself if this sounds likely. Also they understand that most of these companies are 100% losses anyway, but real estate investments are much less likely to go to zero. (Plus rent is just cold hard cash.)
- nerfbatplz 3y agoDavid Sachs whinges about his SF real estate portfolio nearly every episode of the all in podcast.
- porlb 3y agoEvidence human behavior does not align with your awareness is all over. Why would you accept my data without checking the methods? The onus is on you to prove a very reasonable human behavior false. Whole lot of people saying we ought not fiddle kids been arrested for diddling kids. Reasonable real world, if emotionally “wrong” feeling does not make the notion wrong. You want data the sun rose in the east, go outside. So many demand technical correctness in others, think without checking themselves, they know what’s true.
- treyd 3y agoIt's entirely plausible this is true just one layer up, where major partners at SF VCs are separarely invested in real estate investment firms without actually making that part of the VC strategy.
- jkukul 3y agoOr one layer down (= founders), let’s not forget Adam Neumann renting his properties to WeWork
- voisin 3y agoWhich VCs own real estate that remotely measures up to their portfolio companies such that they would risk their portfolio company productivity for their real estate returns?