5 ms·

I suspect there's a bit of a culture clash thing going on too. Dave's F-bombs and piratical demeanor may not sit well with institutional investors, who probably

I suspect there's a bit of a culture clash thing going on too. Dave's F-bombs and piratical demeanor may not sit well with institutional investors, who probably lie at the more strait-laced end of the spectrum... :-)

vasilipupkin 12y ago
Nah. They are afraid of the indexing model. Look at what index funds have done to active management in the public markets.
- pbreit 12y ago
  How does what 500 do resemble index investing? High quantity? Limited evaluation?
  - joncooper 12y ago
    Both. And low portfolio concentration.
- pa5tabear 12y ago
  What's the effect you're talking about? I assume they favor diversification and therefore cause lower overall variation in the performance of companies invested in?
  - bdcs 12y ago
    I believe vasilipupkin is referring to the financial phenomenon of ETFs, robo-advisers, and the "democratization" of traditional (stocks, bonds real estate) investing. In yesteryear, middlemen (rentiers) would charge premiums for running an active portfolio (of say bonds or stocks). Nowadays, the middlemen have been cut out because the increased returns (if any) didn't cover their fees. This has yet to have happened to VC. Once you move to a invest-in-everything model, there is no need for the investment managers (only advisers which actually help the companies) a la 500S.
- snowwrestler 12y ago
  A big part of the index advantage is that fees are so much lower than an actively managed fund. Does 500 Startups have a similar fee advantage?
k-mcgrady 12y ago
Are there really still adults who care about cursing? I know there are people who don't like it but I don't think it would result in them not doing business with someone. Likewise I swear like a sailor but try not to in a business setting as I find it unprofessional - but I wouldn't hold it against anyone who thinks differently.
- pbreit 12y ago
  Yes, lots. Unnecessary cursing is unimpressive, tactless and distracting.
- mikeleeorg 12y ago
  I'm originally from NYC and have a bunch of friends in the financial world. From at least anecdotal evidence, cursing is alive and well on Wall Street. If you don't want to take my word for it, read any Michael Lewis book on Wall Street.
  - jackgavigan 12y ago
    I've worked as a trader and I agree. But there's a world of difference between swearing at your Bloomberg screens when the market goes against you (or at the guy who just snuck up behind you and farted in your ear), and explaining to a conservative, 55-year old family lawyer or a buttoned-down pension fund trustee why they should invest in 500 Startups instead of that nice, reassuring, corporate venture capital firm.
  - theorique 12y ago
    In my experience, trading desks are less overtly sexist than in the old days (that I've only read about) but there is still lots of profanity and other highly offensive "colorful" language.
- tpeng 12y ago
  Institutional investors are some of the most conservative investors you will ever meet. They don't have much downside from losing money in a fund that looks "normal", and they don't have much upside in outperforming in a fund that looks "weird". They'll look past personality differences for a proven winner but a track record as short as 500 startups' can easily be attributed to luck (even if it is not). It's a principal-agent issue

vasilipupkin 12y ago

Nah. They are afraid of the indexing model. Look at what index funds have done to active management in the public markets.

pbreit 12y ago
How does what 500 do resemble index investing? High quantity? Limited evaluation?
- joncooper 12y ago
  Both. And low portfolio concentration.
pa5tabear 12y ago
What's the effect you're talking about? I assume they favor diversification and therefore cause lower overall variation in the performance of companies invested in?
- bdcs 12y ago
  I believe vasilipupkin is referring to the financial phenomenon of ETFs, robo-advisers, and the "democratization" of traditional (stocks, bonds real estate) investing. In yesteryear, middlemen (rentiers) would charge premiums for running an active portfolio (of say bonds or stocks). Nowadays, the middlemen have been cut out because the increased returns (if any) didn't cover their fees. This has yet to have happened to VC. Once you move to a invest-in-everything model, there is no need for the investment managers (only advisers which actually help the companies) a la 500S.
snowwrestler 12y ago
A big part of the index advantage is that fees are so much lower than an actively managed fund. Does 500 Startups have a similar fee advantage?

k-mcgrady 12y ago

Are there really still adults who care about cursing? I know there are people who don't like it but I don't think it would result in them not doing business with someone. Likewise I swear like a sailor but try not to in a business setting as I find it unprofessional - but I wouldn't hold it against anyone who thinks differently.

pbreit 12y ago
Yes, lots. Unnecessary cursing is unimpressive, tactless and distracting.
mikeleeorg 12y ago
I'm originally from NYC and have a bunch of friends in the financial world. From at least anecdotal evidence, cursing is alive and well on Wall Street. If you don't want to take my word for it, read any Michael Lewis book on Wall Street.
- jackgavigan 12y ago
  I've worked as a trader and I agree. But there's a world of difference between swearing at your Bloomberg screens when the market goes against you (or at the guy who just snuck up behind you and farted in your ear), and explaining to a conservative, 55-year old family lawyer or a buttoned-down pension fund trustee why they should invest in 500 Startups instead of that nice, reassuring, corporate venture capital firm.
- theorique 12y ago
  In my experience, trading desks are less overtly sexist than in the old days (that I've only read about) but there is still lots of profanity and other highly offensive "colorful" language.
tpeng 12y ago
Institutional investors are some of the most conservative investors you will ever meet. They don't have much downside from losing money in a fund that looks "normal", and they don't have much upside in outperforming in a fund that looks "weird". They'll look past personality differences for a proven winner but a track record as short as 500 startups' can easily be attributed to luck (even if it is not). It's a principal-agent issue