5 ms·

i would assume investors giving billions of dollars have done their due diligence and not base it off vibes...

by c0rruptbytes 4mo ago

duped 4mo ago
Investors would never give billions of dollars to liars
- sandeepkd 4mo ago
  Idk if anyone cares about lying at this point anymore, this is just placing bets on the AI, and its a lot easier to bet when its someone else's money.
bnagh 4mo ago
They get in now because they want a high IPO exit. They care about the perception of the numbers, not about reality. If you think investment banks will catch them during the IPO: They have launched many overpriced IPOs in 1999/2000 and also want a high IPO price.
- sberens 4mo ago
  Investors are usually prevented from selling until 180 days after IPO
  - throwaway85825 4mo ago
    The rules can be changed, they did for spacex.
    - stingraycharles 4mo ago
      Yeah but SpaceX has undergone some “changes” in the past few months that make it a dumpster fire, rather than Anthropic’s explosive growth. Also, I don’t think the CEOs of both companies operate in the same way.
      - throwaway85825 4mo ago
        I dont see why changes at spacex would necessitate any changes at nasdaq.
        0Ggr3g 4mo ago
        From what I heard, nasdaq changed the rules so that Spacex can be added sooner to the index. Then pension will essentially buy SpaceX (via index), bringing the necessary liquidity for SpaceX exec to exit (very fast thanks to SpaceX rule change)
        aussiegreenie 4mo ago
        The US capital markets are closer to Putin's Russia than to free markets. Historically, listing rules asked: "How much money did you make last year, and do you fit our standard corporate governance box?" Today, NASDAQ's rules ask: "Do you have the massive market capitalisation, sufficient institutional public float, and transparent liquidity to ensure fair and orderly trading?" Here are the obvious ones: 1. Free float - Every company that intended to list was required to have at least 20% free float. 2. Index weights were based on the free float. 3. Time before inclusion into the Indices (min 12 months) now 15 trading days 4. Lockup period - minimum 12 months up to 24 months - not 180 days. I wish people would understand that if America had a functioning criminal justice system, no one would have heard Elon Musk nor Donald Trump.
  - rchaud 4mo ago
    If the investors are VCs, they can sell their holdings to a syndicate of underwriter banks in advance of the IPO, and let the banks shoulder the risk of finding a bigger fool in the secondary markets.
  - coldtea 4mo ago
    They have a dozen tricks to get around that... e.g. "The passive funds holding trillions of dollars of 401(k)s and other investments are rushing to change their rules as the IPOs of SpaceX, OpenAI and Anthropic draw closer." Those index providers are the same interest class with VCs. With such moves they inflate demand post-IPO (hoping it holds for 180+ days), but also allows them to lure buyers in private secondary market and offload that shit pre-IPO. https://www.wsj.com/finance/stocks/stock-indexes-are-contorting-themselves-to-include-spacex-and-openai-92136b13?utm_source=chatgpt.com https://www.wsj.com/finance/stocks/stock-indexes-are-contort...
vdfs 4mo ago
That's basically how 2008 happened
ajyoon 4mo ago
Investors made bad decisions all the time. The proof is in revenue.
deleted 4mo ago
[deleted]
sandeepkd 4mo ago
I seriously doubt that anyone is doing much of a due diligence here. They are either counting on others to do it and just follow along OR investing some more money to keep this thing alive enough to go through the IPO. ARR seems like a interesting concept which hides away the concrete details and is counting on a futuristic possible commitment especially for companies at this early stages. The crucial detail is probably the money being spent, that is what is fueling this sale of equity at this point.
- deleted 4mo ago
  [deleted]
- Nevermark 4mo ago
  > ARR seems like a interesting concept Yes, it is a meaningful financial measure of actual progress, exactly where progress is most needed for a new company. > which hides away the concrete details A normal metric isn't a magic trick. It's just the number it is. > The crucial detail is probably the money being spent Accelerating (not just fast) revenue growth at an astounding rate, with absolute numbers that are enormous for a new company, bonkers for a 2500 employee startup [0], is the crucial "detail". There are lots of companies with deep pockets and compute, making great AI efforts with teams of smart people, that would love to be doing, but are not doing, what Anthropic is doing and doing well. That might be the second crucial detail. [0] https://en.wikipedia.org/wiki/Anthropic https://en.wikipedia.org/wiki/Anthropic
  - sandeepkd 4mo ago
    > A normal metric isn't a magic trick. It's just the number it is. ARR as a number for steady business or public company is much simpler, ARR for companies at this early stage fueled by the motivation for IPO is more than just a number. Its an attempt to convince the market for a certain outcome without revealing the books > Accelerating (not just fast) revenue growth at an astounding rate This acceleration is fueled by somewhat artificial demand (AI mandates by executives across the board, still figuring out the realistic use cases) and subsidized pricing. The expenses matter cause they are the ones which are going to dictate if the business is sustainable or not.
dogwalker5000 4mo ago
After cases like Madoff, Theranos, and FTX … I don’t know about that.
vishnugupta 4mo ago
You’d be surprised how much vibe is there in VC investing. When one is under the grip of irrational exuberance and FOMO due diligence goes out the window. For example look at Sequoia’s investment into FTX and article about Sam that accompanied.
- Nevermark 4mo ago
  True, but this is not what might be considered an unexamined company. You can be sure it's under all its investors' microscopes. If for no other reason than they would rather spend their days procrastinating on everything else, so they can obsess over some of the most interesting numbers they will ever see.
  - casey2 4mo ago
    FTX was examined, investors thought it was impressive that Sam was playing Bronze ELO LOL while in meetings.
  - GoblinSlayer 4mo ago
    Soros too believes that traders are retarded.
- fuzzfactor 4mo ago
  Well if you've got billions of dollars just sitting around doing nothing, and many many more billions of dollars that are performing wonderfully, you should be able to afford throwing a few billion away if that's what ends up happening.
- c0rruptbytes 4mo ago
  yes but Sequoia invested like 200m, we're talking like Google investing 30b...very different scales and bureaucracies
AlexandrB 4mo ago
There are plenty of examples of investors going off of vibes: Theranos, Juicero, WeWork. Though Anthropic would be a particularly egregious example if it does end up failing.
lurk2 4mo ago
WeWork, Theranos, FTX
coldtea 4mo ago
Market crashes like the dotcom bust, and countless companies stock rising to high heavens to crash a few months after IPO to shit say otherwise. VALinux was a poster child for investment... lol Not to mention even a total shitshow from an obvious crackpot like Theranos got $1.2 billion total funding, and a 9B valuation. Or FTX.
iancmceachern 4mo ago
I used to think this too. Now I know different.

i would assume investors giving billions of dollars have done their due diligence and not base it off vibes...

duped 4mo ago

Investors would never give billions of dollars to liars

sandeepkd 4mo ago
Idk if anyone cares about lying at this point anymore, this is just placing bets on the AI, and its a lot easier to bet when its someone else's money.

bnagh 4mo ago

They get in now because they want a high IPO exit. They care about the perception of the numbers, not about reality. If you think investment banks will catch them during the IPO: They have launched many overpriced IPOs in 1999/2000 and also want a high IPO price.

sberens 4mo ago
Investors are usually prevented from selling until 180 days after IPO
- throwaway85825 4mo ago
  The rules can be changed, they did for spacex.
  - stingraycharles 4mo ago
    Yeah but SpaceX has undergone some “changes” in the past few months that make it a dumpster fire, rather than Anthropic’s explosive growth. Also, I don’t think the CEOs of both companies operate in the same way.
    - throwaway85825 4mo ago
      I dont see why changes at spacex would necessitate any changes at nasdaq.
      - 0Ggr3g 4mo ago
        From what I heard, nasdaq changed the rules so that Spacex can be added sooner to the index. Then pension will essentially buy SpaceX (via index), bringing the necessary liquidity for SpaceX exec to exit (very fast thanks to SpaceX rule change)
      - aussiegreenie 4mo ago
        The US capital markets are closer to Putin's Russia than to free markets. Historically, listing rules asked: "How much money did you make last year, and do you fit our standard corporate governance box?" Today, NASDAQ's rules ask: "Do you have the massive market capitalisation, sufficient institutional public float, and transparent liquidity to ensure fair and orderly trading?" Here are the obvious ones: 1. Free float - Every company that intended to list was required to have at least 20% free float. 2. Index weights were based on the free float. 3. Time before inclusion into the Indices (min 12 months) now 15 trading days 4. Lockup period - minimum 12 months up to 24 months - not 180 days. I wish people would understand that if America had a functioning criminal justice system, no one would have heard Elon Musk nor Donald Trump.
- rchaud 4mo ago
  If the investors are VCs, they can sell their holdings to a syndicate of underwriter banks in advance of the IPO, and let the banks shoulder the risk of finding a bigger fool in the secondary markets.
- coldtea 4mo ago
  They have a dozen tricks to get around that... e.g. "The passive funds holding trillions of dollars of 401(k)s and other investments are rushing to change their rules as the IPOs of SpaceX, OpenAI and Anthropic draw closer." Those index providers are the same interest class with VCs. With such moves they inflate demand post-IPO (hoping it holds for 180+ days), but also allows them to lure buyers in private secondary market and offload that shit pre-IPO. https://www.wsj.com/finance/stocks/stock-indexes-are-contorting-themselves-to-include-spacex-and-openai-92136b13?utm_source=chatgpt.com https://www.wsj.com/finance/stocks/stock-indexes-are-contort...

vdfs 4mo ago

That's basically how 2008 happened

ajyoon 4mo ago

Investors made bad decisions all the time. The proof is in revenue.

deleted 4mo ago

[deleted]

sandeepkd 4mo ago

I seriously doubt that anyone is doing much of a due diligence here. They are either counting on others to do it and just follow along OR investing some more money to keep this thing alive enough to go through the IPO. ARR seems like a interesting concept which hides away the concrete details and is counting on a futuristic possible commitment especially for companies at this early stages. The crucial detail is probably the money being spent, that is what is fueling this sale of equity at this point.

deleted 4mo ago
[deleted]
Nevermark 4mo ago
> ARR seems like a interesting concept Yes, it is a meaningful financial measure of actual progress, exactly where progress is most needed for a new company. > which hides away the concrete details A normal metric isn't a magic trick. It's just the number it is. > The crucial detail is probably the money being spent Accelerating (not just fast) revenue growth at an astounding rate, with absolute numbers that are enormous for a new company, bonkers for a 2500 employee startup [0], is the crucial "detail". There are lots of companies with deep pockets and compute, making great AI efforts with teams of smart people, that would love to be doing, but are not doing, what Anthropic is doing and doing well. That might be the second crucial detail. [0] https://en.wikipedia.org/wiki/Anthropic https://en.wikipedia.org/wiki/Anthropic
- sandeepkd 4mo ago
  > A normal metric isn't a magic trick. It's just the number it is. ARR as a number for steady business or public company is much simpler, ARR for companies at this early stage fueled by the motivation for IPO is more than just a number. Its an attempt to convince the market for a certain outcome without revealing the books > Accelerating (not just fast) revenue growth at an astounding rate This acceleration is fueled by somewhat artificial demand (AI mandates by executives across the board, still figuring out the realistic use cases) and subsidized pricing. The expenses matter cause they are the ones which are going to dictate if the business is sustainable or not.

dogwalker5000 4mo ago

After cases like Madoff, Theranos, and FTX … I don’t know about that.

vishnugupta 4mo ago

You’d be surprised how much vibe is there in VC investing. When one is under the grip of irrational exuberance and FOMO due diligence goes out the window. For example look at Sequoia’s investment into FTX and article about Sam that accompanied.

Nevermark 4mo ago
True, but this is not what might be considered an unexamined company. You can be sure it's under all its investors' microscopes. If for no other reason than they would rather spend their days procrastinating on everything else, so they can obsess over some of the most interesting numbers they will ever see.
- casey2 4mo ago
  FTX was examined, investors thought it was impressive that Sam was playing Bronze ELO LOL while in meetings.
- GoblinSlayer 4mo ago
  Soros too believes that traders are retarded.
fuzzfactor 4mo ago
Well if you've got billions of dollars just sitting around doing nothing, and many many more billions of dollars that are performing wonderfully, you should be able to afford throwing a few billion away if that's what ends up happening.
c0rruptbytes 4mo ago
yes but Sequoia invested like 200m, we're talking like Google investing 30b...very different scales and bureaucracies

AlexandrB 4mo ago

There are plenty of examples of investors going off of vibes: Theranos, Juicero, WeWork. Though Anthropic would be a particularly egregious example if it does end up failing.

lurk2 4mo ago

WeWork, Theranos, FTX

coldtea 4mo ago

Market crashes like the dotcom bust, and countless companies stock rising to high heavens to crash a few months after IPO to shit say otherwise. VALinux was a poster child for investment... lol Not to mention even a total shitshow from an obvious crackpot like Theranos got $1.2 billion total funding, and a 9B valuation. Or FTX.

iancmceachern 4mo ago

I used to think this too. Now I know different.