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Silicon Valley used to be the exact opposite of Wall Street (i.e. totally about "What you know" or "What you can do") but over the last decade, it has been evol
by patio11 11y ago
Silicon Valley used to be the exact opposite of Wall Street (i.e. totally about "What you know" or "What you can do") but over the last decade, it has been evolving towards a "Who you know"-ocracy.
I respectfully think this is unlikely to be a true reflection of reality. Testable proposition: you survey 50 partners with investing authority at an arbitrary sampling of top Valley VC firm in 1998 and in 2015. Do you believe that the 1998 vintage will include more partners who either a) have ever had an operational role at a technology company other than a VC firm or b) could successfully pass FizzBuzz?
My understanding is that one of the worst-kept secrets in Silicon Valley is that a VC and a banker are distinguishable in exactly one way: bankers don't wear khaki. They come from the same social backgrounds. They study the same things at the same schools. They have strikingly similar career arcs. Their core skill set is identical: convincing wealthy people and institutions to overpay them for financial services.
The newfangled Silicon Valley innovation is that there might actually be a technologist in the room when the adults are talking about money these days.
- adventured 11y agoMany of the best VCs are easily distinguishable from Wall St bankers in another critical way: they're very competent when it comes to technology. Understanding it, seeing where it's going, and knowing where it has been. They also often have a very different background vs bankers: degrees in engineering and computer science. See: Marc Andreessen, Ben Horowitz, Peter Thiel, Doug Leone, Vinod Khosla, Paul Graham, Bill Gurley, Jenny Lee, John Doerr, and countless other examples - these people get technology in a way your typical banker never will.
- tptacek 11y agoThat's certainly the mythology behind Valley venture capital, but we needn't stipulate that it's true for Patrick's argument to remain plausible. Certainly, it seems like an extraordinarily implausible claim that VC in 1998 was better than it is now. I raised mid-7 figures, institutionally, in '99. VC in '99 was atrocious.
- meatysnapper 11y ago"These people get technology in a way your typical banker never will". I think that's very wrong. A lot of very clever, ambitious people go into high finance, and these people are perfectly capable of "getting it". They may not become expert programmers over night, but they are certainly capable of figuring out how an industry may look with a new startup on the scene.
- rayiner 11y agoThere VCs with operational experience are in the distinct minority. That said, your suit-wearing history major banker from Goldman is a pretty sharp guy and I think people around here underestimate how easily they can grok technology.