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I know you're exaggerating for effect but I'm having trouble threading the needle here. The "average VC tech company" gets nowhere near public market investors
by georgespencer 3y ago
I know you're exaggerating for effect but I'm having trouble threading the needle here. The "average VC tech company" gets nowhere near public market investors and, if indeed it is run "as a pump and dump scheme" would have a narrow impact on the LPs of the venture funds. Gotta imagine most LPs are sophisticated investors? Pension funds, that sort of thing.
Crypto, on the other hand, seems to be predicated on retail investors and consumers. So they do seem manifestly different as you have expressed them (maybe my issue is with the notion of the "average" VC-backed company?).
- RestlessMind 3y agoIn the principle of charity, I would assume that the GP meant average tech companies that reach public markets via IPOs or SPACs. Just look at the performance of those in the last few years. They have crashed much harder than S&P.
- ReflectedImage 3y agoVC is the search for unicorns. Fund 50 companies and 1 will make back the costs of the other 49 and then some. By design the average VC tech company (the 49) is a flaming failure. That doesn't mean they can't be packaged up and sold.
- georgespencer 3y agoTotally get the dynamics of venture capital, but there seems to be a very big gap between funding 50 companies with 1 returning the entire fund and what OP described which is the "average" VC-backed company eventually being used to attempt to defraud unsophisticated consumer and public market investors.