4 ms·

I'd rather be an adventure capitalist: contribute excellent products and services to the market, while living an adventurous life with the proceeds. What's the

by m52go 11y ago

I'd rather be an adventure capitalist: contribute excellent products and services to the market, while living an adventurous life with the proceeds. What's the fun in sitting on your ass rating/gambling on others' fortunes? Make your own! BTW Aswath Damodaran once made a very astute point regarding VCs: they're traders, not investors, looking to enter low and exit high. Period. Anyone under the delusion that these people invest for the greater good is (largely) mistaken. That's not necessarily a bad thing, but just not how I'd personally like to see my occupation defined.

vijayr 11y ago
contribute excellent products and services to the market, while living an adventurous life with the proceeds I'd bet most of the people who hang out in places like YC want the same. What is the probability of success though?
ycosynot 11y ago
Well, you're not helping by reinforcing the idea. People in general don't like people who get rich randomly (or as good as), because it's unfair (so it triggers the anti-cheat response), and yet, it's needed. So we should be careful of the bias, and I think it'd be all the better if the occupation was taken by people who care about the definition of their occupation. The hate on traders is a feedback loop leading nowhere.
- m52go 11y ago
  I'm indifferent to the situation. I don't hate traders & I don't hate VCs. I quite admire the few I've met. In a sense, one could say traders embody the essence of the human spirit. They provide an essential service for the markets, as you say, and that's fine. I just don't desire to be a part of it.
- jklein11 11y ago
  Not sure why you got downvoted. This comment opened up my eyes to the reason why I am biased against traders. If I dislike people who are rewarded for the risks that they take I should also be sympathetic to those who took those risks and lost.
- adventured 11y ago
  I agree with your premise, but not the notion that getting rich randomly is unfair. It is often irrationally regarded as unfair however. For it to actually be unfair, there has to be a legitimately injured party. As an example, Flappy Bird's creator didn't injure anybody, and did not take anything from anyone else (I'm not sure if you can get more random, for this discussion, than that product's brief but sensational rise). There's no possibility of objectively defining the random aspect - what qualifies as random and what doesn't (varying from lottery winners to someone claiming Paul Allen fits the category). That logic hint makes it clear that the idea that getting rich randomly is unfair, is an invalid notion to begin with. It falls into the same camp as thinking that all wealth in general is unfair - a strictly subjective feeling, typically derived from a person's philosophy on life.
andyidsinga 11y ago
> "these people..." gotta be careful with the generalizations.
- m52go 11y ago
  Your comment is (largely) ignorant of what I actually wrote.
  - andyidsinga 11y ago
    okaaaay. the whole "these people are only into something for X" ignores a lot about human nature. motivations and circumstances change all the time and over time.
jacquesm 11y ago
> BTW Aswath Damodaran once made a very astute point regarding VCs: they're traders, not investors, looking to enter low and exit high. Period. Anyone under the delusion that these people invest for the greater good is (largely) mistaken. I know at least one exception to that rule, so even if you might right in the aggregate remember that VCs just like founders are people too and generalization across populations is bound to treat individuals poorly.
- m52go 11y ago
  Absolutely, and that's why I qualified my statement with 'largely'. A sweeping generalization would have been irresponsible of me.
7Figures2Commas 11y ago
> BTW Aswath Damodaran once made a very astute point regarding VCs: they're traders, not investors, looking to enter low and exit high. Period. Notwithstanding the fact that investors look to buy low and sell high too, the point here is incorrect. Venture capitalists, like many in financial services, are not really traders or investors. Sure, they might trade and/or invest, but their primary function is to raise capital that they can siphon fees from. A 2% annual fee on committed capital on a $500 million fund that has an expected life of at least 10 years will produce $100 million or more in fees for a venture capital firm over its lifetime. Add a new, larger fund every few years (assuming you don't blow an earlier fund up) and you can see that the 20% carry, while potentially very significant, is really just icing on the cake. Anybody who really wants to succeed as a venture capitalist should understand this. Incidentally, when you recognize that the limited partner side of the equation is more important than the startup side of the equation, it's not surprising that venture capital has a herd mentality and there are few true cowboys making bold bets. There is little to no incentive to stray too far from the pack.
- m52go 11y ago
  The comment he made was with regard to the mentality they have when determining whether to deploy capital, not so much the legal and financial structure of their deals. You can see the full context here, worded better originally than I could hope to paraphrase: http://bubbleinvestment.com/qa-with-aswath-damodaran-nyu-professor-valuation-virtuoso/ http://bubbleinvestment.com/qa-with-aswath-damodaran-nyu-pro...
  - 7Figures2Commas 11y ago
    You seem to be missing the point: venture capitalists raise money to generate fees. How you classify what they do with the money left over after fees isn't all that important because the primary business is fee generation.
    - m52go 11y ago
      > How you classify what they do with the money left over after fees isn't all that important because the primary business is fee generation. Right. But the 'what they do with the money left over after fees' happens to be the subject of this discussion. You're arguing a moot point.

by m52go 11y ago

vijayr 11y ago

contribute excellent products and services to the market, while living an adventurous life with the proceeds I'd bet most of the people who hang out in places like YC want the same. What is the probability of success though?

ycosynot 11y ago

Well, you're not helping by reinforcing the idea. People in general don't like people who get rich randomly (or as good as), because it's unfair (so it triggers the anti-cheat response), and yet, it's needed. So we should be careful of the bias, and I think it'd be all the better if the occupation was taken by people who care about the definition of their occupation. The hate on traders is a feedback loop leading nowhere.

m52go 11y ago
I'm indifferent to the situation. I don't hate traders & I don't hate VCs. I quite admire the few I've met. In a sense, one could say traders embody the essence of the human spirit. They provide an essential service for the markets, as you say, and that's fine. I just don't desire to be a part of it.
jklein11 11y ago
Not sure why you got downvoted. This comment opened up my eyes to the reason why I am biased against traders. If I dislike people who are rewarded for the risks that they take I should also be sympathetic to those who took those risks and lost.
adventured 11y ago
I agree with your premise, but not the notion that getting rich randomly is unfair. It is often irrationally regarded as unfair however. For it to actually be unfair, there has to be a legitimately injured party. As an example, Flappy Bird's creator didn't injure anybody, and did not take anything from anyone else (I'm not sure if you can get more random, for this discussion, than that product's brief but sensational rise). There's no possibility of objectively defining the random aspect - what qualifies as random and what doesn't (varying from lottery winners to someone claiming Paul Allen fits the category). That logic hint makes it clear that the idea that getting rich randomly is unfair, is an invalid notion to begin with. It falls into the same camp as thinking that all wealth in general is unfair - a strictly subjective feeling, typically derived from a person's philosophy on life.

andyidsinga 11y ago

> "these people..." gotta be careful with the generalizations.

m52go 11y ago
Your comment is (largely) ignorant of what I actually wrote.
- andyidsinga 11y ago
  okaaaay. the whole "these people are only into something for X" ignores a lot about human nature. motivations and circumstances change all the time and over time.

jacquesm 11y ago

> BTW Aswath Damodaran once made a very astute point regarding VCs: they're traders, not investors, looking to enter low and exit high. Period. Anyone under the delusion that these people invest for the greater good is (largely) mistaken. I know at least one exception to that rule, so even if you might right in the aggregate remember that VCs just like founders are people too and generalization across populations is bound to treat individuals poorly.

m52go 11y ago
Absolutely, and that's why I qualified my statement with 'largely'. A sweeping generalization would have been irresponsible of me.

7Figures2Commas 11y ago

> BTW Aswath Damodaran once made a very astute point regarding VCs: they're traders, not investors, looking to enter low and exit high. Period. Notwithstanding the fact that investors look to buy low and sell high too, the point here is incorrect. Venture capitalists, like many in financial services, are not really traders or investors. Sure, they might trade and/or invest, but their primary function is to raise capital that they can siphon fees from. A 2% annual fee on committed capital on a $500 million fund that has an expected life of at least 10 years will produce $100 million or more in fees for a venture capital firm over its lifetime. Add a new, larger fund every few years (assuming you don't blow an earlier fund up) and you can see that the 20% carry, while potentially very significant, is really just icing on the cake. Anybody who really wants to succeed as a venture capitalist should understand this. Incidentally, when you recognize that the limited partner side of the equation is more important than the startup side of the equation, it's not surprising that venture capital has a herd mentality and there are few true cowboys making bold bets. There is little to no incentive to stray too far from the pack.

m52go 11y ago
The comment he made was with regard to the mentality they have when determining whether to deploy capital, not so much the legal and financial structure of their deals. You can see the full context here, worded better originally than I could hope to paraphrase: http://bubbleinvestment.com/qa-with-aswath-damodaran-nyu-professor-valuation-virtuoso/ http://bubbleinvestment.com/qa-with-aswath-damodaran-nyu-pro...
- 7Figures2Commas 11y ago
  You seem to be missing the point: venture capitalists raise money to generate fees. How you classify what they do with the money left over after fees isn't all that important because the primary business is fee generation.
  - m52go 11y ago
    > How you classify what they do with the money left over after fees isn't all that important because the primary business is fee generation. Right. But the 'what they do with the money left over after fees' happens to be the subject of this discussion. You're arguing a moot point.