4 ms·

I think your view while mostly valid, is too simplistic in regards to the role of VCs. The relationship between a VC and an entrepreneur is symbiotic, not para

I think your view while mostly valid, is too simplistic in regards to the role of VCs. The relationship between a VC and an entrepreneur is symbiotic, not parasitic. The VC has collected extra cash he wants to risk to produce good returns on. The entrepreneur wants to build a business but does not have the funds to see it through the growth phase on his/her own. The two of you can get together to produce something that neither of you could have done individually. Each getting a slice of a pie that would not have existed if you had not worked together.

jahaja 13y ago
One could argue that it's only symbiotic given todays capitalist society as a premise (limited options for investment - as capital is concentrated - and basic needs is not met by society).
GFK_of_xmaspast 12y ago
The whole point of VC is to live, vampire-like, on the labor of those funded.
firstOrder 12y ago
> The VC has collected extra cash How was that cash collected? What is the VC collecting now? He collected cash from the last batch of "entrepreneurs" and their teams who did all the work and wealth creation. He's doing it with the current guy, which will fund him doing it to the next guy. He's not collecting cash like picking apples from a tree. He's parasitically leeching off the working wealth creators, as are his heir LPs. The pie is divided up in a certain way. Of course the VC side has it in their interest to tell some story of how deserving they are. Of anything I can think of, I can't think of anything that would motivate people to tell a BS story more than why their pie slice should be a certain size. Anyone who says that there is some omniscient, objective obviousness to some positive quality of VCs is obviously engaging in the most standard argument of all of partisans. We're not doing some repeatable experiment on some hypothesis that everyone has an interest in accepting. It's a zero-sum division of a pie, and if the VC can get over on people that he's so deserving, he wins the game. If we're talking about dividing the pie, everyone piping in with a comment has an agenda, whether hidden or not.
wahsd 12y ago
I actually see it as being rather simplistic to assume it's a symbiotic relationship instead of a parasitic one. Parasites can often implement methods to make themselves attractive or initiate the parasitic relationship, precisely, because it is mostly in their own main interest. We just recently saw the owner of the Klippers expose that same relationship, just because something is on a far larger scale, does not mean that it is any less the same thing underlying it. Yes, _some_ founders get insanely wealthy, but the VCs get even wealthier because they have fine-tuned a formula of exploitation and manipulation. Yes, a lot of investments they make go bust, but that's why they take an arm and a leg and a pound of flesh while they're at it. They are essentially diversifying their investments, but they are also profiteering from a huge arbitrage opportunity. They are essentially trading in the inefficiencies of the market because that is risk they don't want to burden and don't really actually want to do any work to do due diligence to find the good investments. They are in the business of statistical investment..... the more money you throw at it, the higher the likelihood of hitting the bulls eye....simply based on statistical probability. That is of course offset by various other revenue streams because the scale is not frequent enough to base it purely on statistical probability, but that is the core.

jahaja 13y ago

One could argue that it's only symbiotic given todays capitalist society as a premise (limited options for investment - as capital is concentrated - and basic needs is not met by society).

GFK_of_xmaspast 12y ago

The whole point of VC is to live, vampire-like, on the labor of those funded.

firstOrder 12y ago

> The VC has collected extra cash How was that cash collected? What is the VC collecting now? He collected cash from the last batch of "entrepreneurs" and their teams who did all the work and wealth creation. He's doing it with the current guy, which will fund him doing it to the next guy. He's not collecting cash like picking apples from a tree. He's parasitically leeching off the working wealth creators, as are his heir LPs. The pie is divided up in a certain way. Of course the VC side has it in their interest to tell some story of how deserving they are. Of anything I can think of, I can't think of anything that would motivate people to tell a BS story more than why their pie slice should be a certain size. Anyone who says that there is some omniscient, objective obviousness to some positive quality of VCs is obviously engaging in the most standard argument of all of partisans. We're not doing some repeatable experiment on some hypothesis that everyone has an interest in accepting. It's a zero-sum division of a pie, and if the VC can get over on people that he's so deserving, he wins the game. If we're talking about dividing the pie, everyone piping in with a comment has an agenda, whether hidden or not.

wahsd 12y ago

I actually see it as being rather simplistic to assume it's a symbiotic relationship instead of a parasitic one. Parasites can often implement methods to make themselves attractive or initiate the parasitic relationship, precisely, because it is mostly in their own main interest. We just recently saw the owner of the Klippers expose that same relationship, just because something is on a far larger scale, does not mean that it is any less the same thing underlying it. Yes, _some_ founders get insanely wealthy, but the VCs get even wealthier because they have fine-tuned a formula of exploitation and manipulation. Yes, a lot of investments they make go bust, but that's why they take an arm and a leg and a pound of flesh while they're at it. They are essentially diversifying their investments, but they are also profiteering from a huge arbitrage opportunity. They are essentially trading in the inefficiencies of the market because that is risk they don't want to burden and don't really actually want to do any work to do due diligence to find the good investments. They are in the business of statistical investment..... the more money you throw at it, the higher the likelihood of hitting the bulls eye....simply based on statistical probability. That is of course offset by various other revenue streams because the scale is not frequent enough to base it purely on statistical probability, but that is the core.