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I’m a VC and agree with much of this. The mega firms have totally warped VC and the desire for massive cash appreciation has led to a host of bad characters get
by bix6 1mo ago
I’m a VC and agree with much of this. The mega firms have totally warped VC and the desire for massive cash appreciation has led to a host of bad characters getting involved. I still love working with early stage companies but it is hard to cut your own lane when these mega groups control so many aspects of the stack and have such outsized capital and political influence. There are so many issues destroying early stage VC right now. We need major policy change / guardrails but that won’t happen.
- Henchman21 1mo agoY'all need ethics is what ya need.
- bix6 1mo agoI agree. Ethics is at the forefront of everything I do both personally and professionally. I used to serve on an ethics in business council. All the investments we make are grounded in genuinely improving the world. It’s unfortunate that so much money flows to certain VC firms when people like me exist since I reckon I’m much more aligned with what the general population wants.
- bluefirebrand 1mo ago> It’s unfortunate that so much money flows to certain VC firms when people like me exist since I reckon I’m much more aligned with what the general population wants. You sound like a pretty good dude The study of Ethics is such a double edged sword. On one hand you have people who study ethics to think about how to treat people well, on the other hand you have people who study ethics in order to treat people as poorly as possible while still being "ethical" I don't have a ton of firsthand exposure to the decision making process of huge corporations, but I imagine they mostly listen to the second group of ethicists
- bix6 1mo agoI’m trying. I love startups and want as many good entrepreneurs to succeed as possible. All the VC drama causes people to forget the whole point. It’s inherent with true capitalism. You have to be willing to forego some profit to actually treat people right and for some that’s just too much.
- bluefirebrand 1mo ago> You have to be willing to forego some profit to actually treat people right I wish they taught this in business schools. I get the impression they really don't, based on my experiences with business grads
- DrewADesign 1mo agoJudging from the handful of B school professors I’ve interacted with, I’d be surprised if they didn’t. Judging from the many HBS students I’ve interacted with, the takeaway seems to be judiciously avoiding treating people fairly.
- slowin 1mo agoI'm someone in the startup space that's sworn off raising capital and talks to a lot of founders. I can say that if you're willing to take an anti-Zionist position, you will get incredible deal flow from frustrated founders and definitely make your own lane. I know how difficult that is in this space though.
- otterley 1mo agoWhy is anti-Zionism necessary if your business fundamentals are strong?
- slowin 1mo agoSome of us care about the ethics of those we work with. Being a Zionist is also a brand risk. Just look at Vercel when their CEO met with Netanyahu. Many people canceled their accounts and now will never use Vercel. Mainly I don't want to work with people who are enthusiastic about committing genocide, as so many VCs are.
- otterley 1mo agoI don’t follow the logic. Since when does the act of meeting with someone mean you’ve adopted their beliefs? Do you adopt the beliefs of everyone you’ve met? What if you've met both a Zionist and an anti-Zionist? What does that make you?
- slowin 1mo agoRaising money from someone and putting them on your board is more than "meeting with them".
- otterley 1mo agoFor sure. But that's not what you said before. And Netanyahu isn't on Vercel's board, nor did Netanyahu raise money for him. The only news I see about this is a brouhaha over a selfie and a meeting in NYC with different tech business leaders. So I don't quite know what you're on about.
- pixl97 1mo agoEthics are always forced. In a society that does not force ethics in one way or another they will cease to exist.
- layla5alive 1mo agoEthics come directly from first principles.
- pfannkuchen 1mo agoGo on…
- mcv 1mo agoI'm afraid the only ethics some of them believe in is the Friedman Doctrine.
- exceptione 1mo ago> but it is hard to cut your own lane when these mega groups control so many aspects of the stack and have such outsized capital and political influence Are you able to shed some light on this? It would be interesting to hear what people like you come across.
- bix6 1mo agoThere’s a lot so we would need to talk in person. But basically the power law is way too powerful right now. The impact that a small group of people can have is too much and it’s distorting things. This is not unique to VC, the concentration is insane right now across the board.
- cjkaminski 1mo agoBased on my experience on the fundraising side, I'm inclined to agree with your perspective. One small nit to pick: I think policy changes can happen. However, it's hard for me to imagine meaningful change occurring before a catastrophic event. How big would the blast radius be? Obviously no one knows, but I hope it's closer in scope to "The Collapse of Silicon Valley Bank" as opposed to "The Collapse of Lehman Brothers".
- bix6 1mo agoI don’t really have hope because big money controls politics. Everything gets steered towards capital’s interest instead of humanity’s.
- cjkaminski 1mo agoAt the Federal level, absolutely. I could imagine that California and New York could work together to affect meaningful change. It would still be tough because specialty finance regulation is unlikely to generate the type of constituent response usually required for government action, but it's not impossible. That said, reform would be a Herculean task under the best conditions. Effective change would never be a "one and done" operation. It would be great to have a non-profit like the Electronic Frontier Foundation to carry the mantle.
- watwut 1mo agoApparently The Collapse of Silicon Valley Bank is not enough to force change. The Collapse of Lehman Brothers is also not enough for long term change, also apparently.
- cgio 1mo agoI don’t think collapse is by itself a good predictor of change. People in collapse just bow easier. Change of this scale unfortunately comes from terminal and collective despair. Let’s not rule out either normal change, not every marginal action needs to make things worse. The system might have enough variation still to turn around. In short, despair or its anticipation are not optimal strategies.
- sneilan1 1mo agoIs it possible to list the mega firms?
- bix6 1mo agoThere’s lists out there but it’s $10B+ AUM like Andreeseen, sequoia, GC, etc.
- anildash 1mo agoI think “regular” VCs are one of the cohorts of people I feel worst for! I have a lot of friends who got into the business wanting to help entrepreneurs, and now they’re stuck on a cap table with folks who they’d never want to do business with. It’s not any different than the founders or employees who don’t want to be saddled with these guys, either. The hard part is figuring out how to change these structures so that people can actually extract themselves and still build stuff that isn’t toxic and destructive.
- bix6 1mo agoGreat write up anil! Agreed it’s so difficult. And every time I think we have things all figured out, someone flips the table! I’ve seen some ruthless terms for angels too. My buddy took an uncapped SAFE to get in a deal while the deal runners gave themselves a cap.
- jbs789 1mo agoOne thing that always exists in financial markets is cycles. It just might last longer than we care for. I’m a small biz guy and not interested in VC. Very boring.
- lotsofpulp 1mo agoI think the root problem is it takes a lot more money and resources to compete now than it did before. Before, due to broadband being new, everyone not already having high performance computing devices, and the quickly decreasing costs of hardware, it was possible to use a skeleton crew and barebones resources to do something impactful. Or you have to be a very, very exceptional performer. bix6 alludes to it another comment: https://news.ycombinator.com/item?id=49554814 https://news.ycombinator.com/item?id=49554814
- rexreed 1mo agoI don't feel bad for VCs. Venture capital has turned the old style of startup entrepreneurship into a financial hustle of Startupism that is about trading equity value and not about venture creation. Maybe it always was about that, but at least in the 1960s-early 2010s it seemed at least somewhat more about business and value creation. Now it all just seems like a financial hustle. I hope we see VC become the minority way that businesses are built and financed as it used to be in the tech industry.
- quaintdev 1mo agoSometimes I wonder if people will one day wake up and just ditch all the tech. That's seems to be the only way to be out of this mess.
- bix6 1mo agoyes but there is helpful tech! We’re just over focused on SaaS and now AI (new SaaS). I do find myself enjoying my computer / phone less these days though.
- lotsofpulp 1mo agoI find it very useful to be able to look up information at a moment's notice, whether or not a store has something in stock and where it is in the store before I go, doing group chats and video calls with family and friends almost anywhere I am, being able to get a taxi at a known price and see it arrive on a map, etc. I just had a medical emergency in a foreign country and was able to navigate it with relative ease and almost no cost using translation features. I was able to scan and OCR documents with my phone camera which let me easily submit insurance claims, yada yada, a lot of things are much easier and cheaper in this day and age. I stay away from the "news" websites (ironic given this site is called Hacker News, but it's not as monetized, so I guess it still works) and instagram/tiktok/youtube shorts/x style stuff.
- ciefa 1mo agoHard disagree. Societal change and more inventions are needed, not a degrowth attitude.
- yifanl 1mo agoWhat's the difference between the two exactly?
- xpct 1mo agoI wouldn't lump up all inventions into this. The incentives are warped and we're too focused on adtech and filling human lives with screentime. It should be entirely possible to live a fulfilling life without having to carry a phone everywhere you go.
- cyberax 1mo agoI'm in a startup, and we are (somewhat lazily) trying to do Series A fundraising. We _are_ a company that has AI as a part of our app, but not an LLM company. The advice from our early investors was to basically overhype ourselves, telling that we can transform the world overnight. And also to remove any mentions of our _actual_ product that has real paying users because it can muddy the grand vision. Another hot thing in the startup world is what I'm calling the "vibe income". It's potential income from a signed MOU or contingent on the success of some trial. So we have to compete with companies saying that they're already having $500k in "income" after just a few months. We naïvely thought that our GAAP income is more important. I have really bad feelings about this whole situation.
- TheOtherHobbes 1mo agoMost of the industry is running on bullshit. The concept of running a productive service that meets genuine user needs in a clever, delightful, and satisfying way has been replaced by grifting, scamming, hyping, manipulating, and outright lying - a headless chicken voodoo dance to attract moar moneyz and worship the blind, idiot god Number Go Up.
- claytongulick 1mo agoI have so many thoughts about this, I'm not sure where to start. Doing a raise has always been weird, there are lots of things that impact it, and different players in PE have totally different theses and motivations. As a founder, finding the right investment partner has always been one of the most important and difficult things. As a rule of thumb, I recommend to founders that only about 50% of the value of the investor is their cash investment. In many cases, less than that. The things that are at least as important are their advisors (who open doors for you), their portfolio companies that can partner with you, and the alignment of their thesis and worldview. I don't see any of that as having really changed much recently, other than a tightnening of capital for non-AI companies, but I suspect we're going to see a big shift there over the next 18-24 months, as the pressure from the LPs to deploy stays the same, but fingers get burnt from this bubble. Also, don't forget family offices and industry VCs (Optum Ventures, etc...) that have a lot of these features built in to their structure, not just the fund.
- ifwinterco 1mo agoHate to sound like a Marxist but... this is what happens when capital has this much power concentrated in so few people. Eventually the system eats itself. If you're in the right elite at the right time though, you can make a lot of money while everything falls apart underneath
- phkahler 1mo ago>> Eventually the system eats itself. Can it please finish itself before it eats the table, chairs, and dishes?
- FiatLuxDave 1mo agoI'm guessing you located are in the bay area? If so, that is one thing under your control that you could change. The early SV VCs didn't build the industry by staying in NY (where the capital concentration at that time was). They had to get away from that scene to do what they did. It might be easier to cut your own lane if you weren't sharing the same turf.
- bix6 1mo agoI left the bay many years ago :)