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Who Are My Investors?

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Re: Who Are My Investors?

#41

Post by mc32 »

jjeaff wrote: post #30
mc32 wrote: post #26

The question posed by the CEO in question, while valid, is futile --verging on naive. To really mean it, you'll refuse: money, investment and goods from China, Russia, Gulf, many African countries, Latin America, etc. to such an extent so as to bring the world economy to a virtual standstill. In addition to refusing money also No Oil from Saudi, Venezuela, Russia, or Goods from China, Minerals from Africa... It's wel…

There's a difference between accepting money and goods from Chinese or Russian investors and accepting money from specific bad actors. For example, taking investor money (and thus giving voting rights) from groups like SoftBank (which has a ton of Saudi Royal family money), is a totally different ballgame from say, buying MacBooks that are made in China.

It's more than just MacBooks manufactured by internal migrants in China[1]. You also have many Chinese tech giants with SV offices: what, refuse to rent them RE, or refuse them building permits? How far does this go?

[1]https://www.ft.com/content/463b162a-8a3d-11e8-b18d-0181731a0...

Re: Who Are My Investors?

#42

Post by barrkel »

mrleiter wrote: post #36

Ben Hunt pointedly said in his recent article [0]: "With Saudi Arabia, the ubiquitous private information was that Saudi Arabia is a thug state and their Crown Prince MBS is a wannabe Bond villain. But no one acted AS IF they knew this until a Missionary event – in this case Turkey’s very public denunciations of the Saudi government’s murder of Jamal Khashoggi – turned that private information into common knowledge,…

It was ubiquitous information, but it lacked relatability, strategy and focus.

Erdogan has been playing this one very well. The chap is relatable - an American resident, writing for a US newspaper, critiquing a government, just the kind of thing westerners like to venerate in their cultural products. Erdogan has drip-fed the media with information. Since it's so lurid, each extra dose gets more headlines - it's concentrated, potent stuff. And he's kept Saudi guessing - threatening that if they don't come out with the truth, he'll release the details.

He'd lose all leverage if he actually did release everything, but the strategy works very well. Everybody knows MBS almost certainly ordered this clumsy attack in a very naive way. But Erdogan has used the unknowns of the information, and gradual disclosure, as a lever to make Saudi replace their lies repeatedly over time, eating away at their credibility. By keeping western media on the boil, he encourages western politicians to say that Saudi isn't explaining enough.

It's been very interesting to watch, a master class.

(It's not the common knowledge, or the crystalized idea that everybody knows that everybody knows. That's not right at all. It's political pressure being maintained by someone with leverage, a steady hand on that leverage, and a strategy to move things. The lever is joined up: leaks -> western media -> western politicians -> Saudi. Without the continuous pressure, this would all blow over because democratic citizens have pretty short memories most of the time.)

Re: Who Are My Investors?

#43

Post by dcposch »

AndrewKemendo wrote: post #12

At any business effort beyond hyper local markets, there is virtually no way to avoid tainted money or unethical markets. You're going to have to compromise somewhere. The question is, how and where do you draw the line? At some point as a founder/fundraiser, you will cross paths with finance or supply chains that support exploitation, coercion, violence or illegality. The most successful business people don't seem t…

> I've thought through many approaches here, from realpolitik pragmatism to ethical fundamentalism but none feel correct.

So, vet your LPs case by case, discuss with your partners and use your moral judgement.

If a North Korean or Syrian national wants to invest, you are legally required to refuse, in the US.

Saudis? Legally allowed, but you have a moral imperative to refuse.

A Chinese firm, or maybe Jared Kushner's fund? That depends on your outlook and situation.

Just be transparent about who your investors are.

--

This idea that it's "virtually no way to avoid tainted money" is pretty cynical and self serving, IMO.

Re: Who Are My Investors?

#44

Post by barrkel »

dcposch wrote: post #38

Pretty much every single comment so far is cynical. "No one really wants to know how the sausage is made", lots of money is tainted anyway, it's just PR fluff, etc etc. The classic HN Middlebrow Dismissal in full effect. Counterpoint: cynicism is too easy. Actually giving a shit is harder, it's uncomfortable, it involves compromise. Yes, if you refuse investment from any country that has ever violated a human right,…

I think a better ask is to create self-sustaining processes that ratchet to improve the system over time. In a word: regulation. You can't be sure you're consuming ethical meat through consumer pressure alone. You need more eyes in the system, with enough force to be able to see through the veils that the profit motive will put up.

Re: Who Are My Investors?

#45

Post by 3pt14159 »

dcposch wrote: post #38

Pretty much every single comment so far is cynical. "No one really wants to know how the sausage is made", lots of money is tainted anyway, it's just PR fluff, etc etc. The classic HN Middlebrow Dismissal in full effect. Counterpoint: cynicism is too easy. Actually giving a shit is harder, it's uncomfortable, it involves compromise. Yes, if you refuse investment from any country that has ever violated a human right,…

The problem with the global system cracking is that it's pushing this work onto low-information people with mismatched incentives.

If the Sauds have routine trouble getting money into funds they'll resort to tricks that will get them exposure in one way or another. They can acquire a company, they can create their own VP that doesn't list investors but co-invests. It's a never ending battle and one that we're not capable of fairly judging. This should be a Nato / EU / US or UN thing where we have real tools to enforce sanctions.

Re: Who Are My Investors?

#46

Post by samstave »

maxwell wrote: post #34
mc32 wrote: post #26

The question posed by the CEO in question, while valid, is futile --verging on naive. To really mean it, you'll refuse: money, investment and goods from China, Russia, Gulf, many African countries, Latin America, etc. to such an extent so as to bring the world economy to a virtual standstill. In addition to refusing money also No Oil from Saudi, Venezuela, Russia, or Goods from China, Minerals from Africa... It's wel…

> The question posed by the CEO in question, while valid, is futile --verging on naive. From the article: > The CEO asked his VCs because questions were coming up internally and he wanted to answer honestly and accurately. The question was imposed on the CEO by "naive" employees who will quit if the company took money from the Saudis.

When I worked for Savi Technologies (RFID tracking for DoD Weapons/Supplies) - it was bought by Lockheed Martin.

The employees were financially screwed over in the deal.

Several employees - who were muslim - quit on the spot, as they refused to work for a company owned by Lockheed...

Re: Who Are My Investors?

#47

Post by tomkit »

Honorable, but it could also be a slippery slope: how far back do you look? If an LP, or investor in general, uses their personally earned money, but they earned it through capital gains from tainted money - let’s say from stock in a company with human rights issues - do you ask about that and if so do you take their investment?

If you only look at one degree, ie are your direct investors’ money clean, you could also be targeted for laziness in the “supply chain” of your investors’ money. This is similar to problems with blood diamonds, organic foods, unethical coffee etc.

What's needed is a framework and policy in the community for what's acceptable due diligence.

Re: Who Are My Investors?

#48

Post by stephengillie »

3pt14159 wrote: post #45
dcposch wrote: post #38

Pretty much every single comment so far is cynical. "No one really wants to know how the sausage is made", lots of money is tainted anyway, it's just PR fluff, etc etc. The classic HN Middlebrow Dismissal in full effect. Counterpoint: cynicism is too easy. Actually giving a shit is harder, it's uncomfortable, it involves compromise. Yes, if you refuse investment from any country that has ever violated a human right,…

The problem with the global system cracking is that it's pushing this work onto low-information people with mismatched incentives. If the Sauds have routine trouble getting money into funds they'll resort to tricks that will get them exposure in one way or another. They can acquire a company, they can create their own VP that doesn't list investors but co-invests. It's a never ending battle and one that we're not cap…

Just because they have other options doesn't mean the fight is lost before it's begun. We can make this more and more work for them, and keep sending the message. And yes, we can also work to place sanctions on investment from nations that ignore human rights.

If we make better and best into enemies, there's no end to what we can't accomplish.

Re: Who Are My Investors?

#49

Post by [deleted] »

samstave wrote: post #46
maxwell wrote: post #34

Earlier quoted context omitted.

> The question posed by the CEO in question, while valid, is futile --verging on naive. From the article: > The CEO asked his VCs because questions were coming up internally and he wanted to answer honestly and accurately. The question was imposed on the CEO by "naive" employees who will quit if the company took money from the Saudis.

When I worked for Savi Technologies (RFID tracking for DoD Weapons/Supplies) - it was bought by Lockheed Martin. The employees were financially screwed over in the deal. Several employees - who were muslim - quit on the spot, as they refused to work for a company owned by Lockheed...

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