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Who Are My Investors?

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Re: Who Are My Investors?

#111

Post by Baeocystin »

3pt14159 wrote: post #70
stephengillie wrote: post #48

Earlier quoted context omitted.

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.

I usually agree with this line of thinking, and even personally I wouldn't take money from some people like Peter Thiel because of his political actions, but I don't try to get others to do the same. I advocate for systemic or political changes or—if those are hard because of mismatched incentives or low information voters—propaganda, think tank funding, and lobbying to try to fix things. Take plastics use, for examp…

>Take plastics use, for example, it's better to focus energy on banning them completely than to check each and every shampoo personally for microbeads.

The vast majority (>90%) of the plastic waste in the world's oceans comes from a few rivers in asia that run through countries that have minimal to no garbage collection/sanitation services for the cities that border the rivers. Investing in appropriate waste management infrastructure in the countries that need it is the solution to work towards. Plastic bans don't address the fundamental problem.

https://cen.acs.org/materials/polymers/Fighting-ocean-plasti...

Re: Who Are My Investors?

#112

Post by rococode »

dcposch wrote: post #43
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…

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

Perhaps the real intention behind that idea is more like: "you can avoid tainted money but that money may go straight to your less scrupulous competitors". If you don't take the money, someone else will, and they may use it to beat you. To people whose primary focus is the growth of their own business, that could be a big cost for upholding their own sense of moral justice.

Re: Who Are My Investors?

#113

Post by jamiequint »

zt wrote: post #81
refurb wrote: post #75

I hate it when, just because something becomes a big media story (I.e. Saudi Arabia killing a journalist) everyone comes out of the woodwork “oh dear! How can we not do business with these people?” When in fact, it’s been going on for decades and nobody gave a shit... until now, when giving a shit can firm up your virtue signaling.

Except, Fred made the decision about his LPs over the last 15 years...

There's nothing in the article to suggest that this is due to virtue though. It may be just that USV has the luxury of raising from only top tier LPs given their relatively small fund size ($1bn across 6 funds).

Re: Who Are My Investors?

#114

Post by ericjang »

AnthonyMouse wrote: post #105
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,…

> 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. It seems like a deeper problem than that, which is that money is fungible. It's the same thing as saying we shouldn't buy Saudi oil. If the only result is that you buy some other oil and the people who would have bought that oil buy the Saudi oil, n…

Investment opportunities (which VC firms get the money, what deal flow they have, what investment opportunities the VC has) are most certainly not fungible. So I think it's helpful to think of the deal flow in reverse - even though "someone else can take the Saudi money", that "someone else" most likely does not represent exactly the same investment opportunity to the LPs.

FWIW - I do think your assessment of oil is correct (since oil and money are both fungible). But for venture capital, one side of the investment (startup talent, VC skill and network, etc.) are not fungible.

(elaborated a bit more in a twitter rant: https://twitter.com/ericjang11/status/1054115724996694016)

Re: Who Are My Investors?

#115

Post by venantius »

As a soon-to-be-regulated financial institution in the UK, we have to be careful who our investors are (and that includes getting into who the LPs our in our investors' funds). It's very easy to take cash, but nobody wants to have that hard conversation with the regulators 6-12 months down the line when they ask you to fully look up your cap table and you realize a quarter of your company is Russian oligarch money / from the middle east / from questionable shell corporations / etc. As regulators around the world get more serious about money laundering, this will become an increasingly important question for venture-backed firms.

Re: Who Are My Investors?

#116

Post by mychael »

The context for this post is that money is money and money is currently cheap. VCs work hard to create the perception that their money is more valuable than investor's money.

Re: Who Are My Investors?

#117

Post by akiselev »

AnthonyMouse wrote: post #105
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,…

> 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. It seems like a deeper problem than that, which is that money is fungible. It's the same thing as saying we shouldn't buy Saudi oil. If the only result is that you buy some other oil and the people who would have bought that oil buy the Saudi oil, n…

Saudi Arabia is a counter example to your point: Iran has a considerable amount of oil but because of unrelated geopolitical circumstances, it can't easily sell that to the global market like KSA can. That imbalance has little to do the nature of oil and a lot to do with the KSA-United States' petrodollar and arms deals. The geopolitics of the world put KSA in a position to capitalize on its oil wealth and trade it for influence, not the nature of the product.

Currency may be fungible but the quality of investments an LP has access to are not. The hope is that closing off the best avenues for return in an oversaturated capital market will cause rich people with influence to put pressure on the governments.

Re: Who Are My Investors?

#118

Post by samsonradu »

ssijak wrote: post #90
ed_balls wrote: post #77

Earlier quoted context omitted.

As other commenter pointed out, we don't have enough information to judge the situation beyond reasonable doubt. MBS was selling himself as a reformer and everybody deserves a benefit of a doubt. Maybe it was of one the generals that decided to kill the journalist. Why would MBS risk all the deals he has made and about to made? Oil doesn't give him that much leverage right now and sanctions could topple the governmen…

Yes you can know. It is not like this was the first bad thing Saudis have done under his command.. Not to mention the usual evils of such oil nations like spending bilions on personal yachts, art, mansions, etc..., having slave-like labor in your country, kidnapping, behedings for many non-crime (in civilised world) things, etc. "reformer" thing is a joke and a mask.

Not sure one can know. From all angles it looks like a very stupid and badly executed assasination plot. There are a lot more discrete ways to kill someone than flying 15 people/agents over on a private plane. Time will tell hopefully.

Re: Who Are My Investors?

#119

Post by adventured »

jaypeg25 wrote: post #83
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,…

We're at a point now where VCs are going to have to start refusing money from nearly everybody foreign thanks to the new CFIUS rules. They're so overly broad in identifying high-tech industries that I think there's going to be a lot of issues over the next couple years of implementation.

> VCs are going to have to start refusing money from nearly everybody foreign thanks to the new CFIUS rules

That isn't going to happen at all. The point of CFIUS is selective enforcement, not broad, strict enforcement. It's the exact same reason anti-trust laws are vague, so they can selectively go after anyone at any time if they so choose. The point is to be able to further control the economy, whenever that is desirable, and to target a given nation for restrictions if it's viewed as politically advantageous. The point is absolutely not to clamp down on all foreign investment.

Re: Who Are My Investors?

#120

Post by abalone »

nafey wrote: post #68
abalone wrote: post #61

I love that Wilson gives examples of ethical LPs like pension funds and educational endowments. Much of the criticism here is “well if you refuse to take tainted money then the world economy will grind to a halt.” But think of it... if the business community stopped taking tainted money, holding everyone to a high standard, that would be a powerful force to curb human rights abuses in the world. We do have ethical al…

Its a zero sum game. You might reject the investment but others wont

No, South Africa ended apartheid when the international business community and their governments mostly decided to boycott them (after public unrest). It turned businesses that supported apartheid into pariahs.
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