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VCs Are Just Tired

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81–90 of 91 posts

Re: VCs Are Just Tired

#81
post #50

Can’t help but feel like they could literally just take a trip outside SV and get: 1. Easier access to deal flow 2. Lower valuations 3. Less competition If any VCs are interested, HMU I can show you strong deals your peers saw way before you because they looked @ Miami + deals your peers haven’t seen because I live here & I am plugged in.

I'm a fan of Miami, and I don't mean this as a dig: could you point at some venture-sized exits from Miami, especially ones that SV VCs seem to have missed/been late to?

That seems like an unfair question -- how can any city be expected to generate venture sized exits before the money even rolls in? SF/SV have generated the exits they have after decades of continued investment.

Re: VCs Are Just Tired

#82
post #12

Earlier quoted context omitted.

Wouldn't the obvious capitalism solution to that be - loans become very cheap because people dont know what else to do with their money. Lots of people now have access to (other people's) capital. Wealth is no longer as concentrated, wisdom of crowds prevail?

We've been trying that for a good chunk of the last decade. That's why interest rates have gone to near zero, and in some places negative. It's not working so well.

>> That's why interest rates have gone to near zero, and in some places negative. It's not working so well.

To elaborate on the great comment above -- this is not working well because it creates asset bubbles. It also makes one of the most important things people need -- homes -- inflate in value beyond reach for many.

Re: VCs Are Just Tired

#83
post #76
post #55

Earlier quoted context omitted.

> This is like a pharmaceutical company ... If there was anybody who would be motivated to scapegoat a single actor or cause for dysfunction in the medical industry it's me. I've endured debilitating health challenges, including severe pain, for almost half my life. I've had plenty of time and motivation to research and contemplate everything that's wrong with the medical system, including corrupt dealings between ph…

Sorry dude I'm not really tracking with you at all. The OP posited some plain issues that can be dissected and dismissed but was muted by a mod that works for an organization that benefits from just burying said issues. I lean conservative and can't really see how anyone in tech says with a straight face the "gig economy" is good for anybody except the 10^5 or so technical staff and their management and financiers. A…

This comment is starting to wrestle with the complexities of the topic, which is great!

Dang's job is to prevent flamewars on this site, and to cultivate intellectual curiosity.

All he was objecting to in the original comment was that it was of the style that can spark flamewars.

Ultimately, I think we want the same things.

Re: VCs Are Just Tired

#84
post #22

"Lack of bandwidth, hyper-velocity, a pittance of sleep" If we are just going to put together words to describe concepts that make no sense then you are probably meeting people that have never made a dollar on their investment. Some of the best VCs are original thinkers and will take their time making investments. The thing about them is that they will be the first to making an investment in a company even before it…

Venture capitalist success is indistinguishable from randomness. It's pure, unadulterated luck. "The best VCs are thinkers and visionaries" is post-hoc bullshit justifications to make their wealth seem the result of wits and hard work, and not just the product of luck + the pre-existing capital to invest.

I don't see how that can be true. Gambling is pure luck. I've heard too many stories of impressive moves by VCs that paid off for it to be exactly equivalent to gambling.

I think it may look a lot like luck because they make so many speculative 'bets' and so many don't pan out, but that's more a function of the vast sums the successful ones end up being given to invest combined with poor deal flow. But they still aren't random odds.

Simple example: the VC that invested into WhatsApp and got a massive payout when Facebook bought them. Nobody in the Valley VC community knew about WhatsApp because it had no penetration in the USA. But the firm had hired a developer intern to write a script that downloaded the app store listings for every country in the world individually and calculate fast risers. So this VC was the first to realise that WhatsApp was getting huge everywhere except where they actually lived. But then he visited the WhatsApp website and discovered there was no address or contact information anywhere. He did some research and discovered they were based in Mountain View, but literally couldn't find an actual address anywhere.

So he did the obvious thing - he walked the streets of Mountain View systematically looking at every single office building until he found them, tailgated his way in and then sweet talked the receptionist into giving him a meeting with the CEO.

Well the CEO didn't want to take VC investment. So then the guy started on the final stage: convincing him it was a good idea. Eventually the WhatsApp founders concurred and took the money.

Those sorts of actions aren't the actions of gamblers. The guy had a thesis, he worked to put it into action, he even did a lot of physical work and ended up getting a distinctly non-random reward.

Re: VCs Are Just Tired

#85
post #50

Can’t help but feel like they could literally just take a trip outside SV and get: 1. Easier access to deal flow 2. Lower valuations 3. Less competition If any VCs are interested, HMU I can show you strong deals your peers saw way before you because they looked @ Miami + deals your peers haven’t seen because I live here & I am plugged in.

I'm a fan of Miami, and I don't mean this as a dig: could you point at some venture-sized exits from Miami, especially ones that SV VCs seem to have missed/been late to?

Off the top companies that were acquired after their first round:

eBuilder | raised $8.4m -> sold $500m

Chewy.com | raised $450m -> IPO $8.7b

BelugaCDN | undisclosed acquired by SSL provider Comodo

Willing.com | raised $7.1m -> acquired by Life Insurance provider MetLife

Octopi | undisclosed acquired by CargoTec (logistics company)

LiveNinja | raised $3m -> acquired by Net2Phone

If we go by funding round/private valuation:

Magic Leap (I saw the founder pre ML @ local meetups)

REEF technologies (saw them as a competitor for years on a side project before SoftBank dumped $100m in)

Papa (met the founder a few times pre YC)

OnSwipe (saw it before Yuri Milner invested after the company moved to NY)

There’s not a lot of them BUT they are super easy to get to & write checks into if you’re here. Email is in my profile if you want access to a few that are still easy access / low valuation.

Re: VCs Are Just Tired

#86
post #72

Earlier quoted context omitted.

Once one's basic needs are met, which has a upper limit on how much needs to be purchased, what else is there to buy? In the olden days people needed to buy things to keep themselves entertained, but in this day of age we just hop onto the internet for free (effectively).

How is the Internet (effectively) free? * desktops, laptops, phones, tablets, etc aren't free * wireless data plans aren't free * wired Internet connections aren't free * streaming services aren't free

> desktops, laptops, phones, tablets, etc aren't free

But can be obtained for free. People literally throw out perfectly functional machines daily. But anyway, "effectively" was meant to cover the marginal costs of getting onto the internet.

> streaming services aren't free

Okay. While I don't quite see the appeal when there is already an infinite depth of content that is not a paid streaming service, let's talk about streaming services.

The assertion was that if you make more money, you will buy more things. While there is some variation from service to service, streaming services have carved out a price point of around $10 per month. Does that mean for every $10 you make over and above the cost of necessities that you will buy another streaming service? If you are given a $10,000 raise above an income that already provides necessities will you buy 1,000 streaming services? Probably not.

Let's narrow our focus to music streaming services. I like to listen to music at work. Other places too, but work gives us a tidy eight hour window. 173 hours per month, on average. The average song is around three minutes, so nearly 3,500 songs a month. Using the Spotify free music service there are ads and time to queue up songs, so let's say 3,000 songs a month. For argument's sake, let's assume they are all performed by different artists.

When I was younger a CD sold for around $20. Not having much money, I might buy one or two a month, but that's it. If I had more money would I conceivably buy more CDs to access those 3,000 songs I listen to now? I think the answer is yes. I would have bought more CDs if I had more money.

But now I get that for what is effectively free. Even if I did pay the marginal cost to access a non-free tier on a music steaming service, that payment buys me all the music, so to speak. What would have cost $60,000 per month 30 years ago would now cost somewhere around $10 a month, with, most importantly, no linear increase in price with consumption.

So, sure, you need to buy a few things, like a computer and internet access. But the point is that, even given unlimited money, one quickly runs out of things to buy in this day of age.

Re: VCs Are Just Tired

#87
post #84
post #22

Earlier quoted context omitted.

Venture capitalist success is indistinguishable from randomness. It's pure, unadulterated luck. "The best VCs are thinkers and visionaries" is post-hoc bullshit justifications to make their wealth seem the result of wits and hard work, and not just the product of luck + the pre-existing capital to invest.

I don't see how that can be true. Gambling is pure luck. I've heard too many stories of impressive moves by VCs that paid off for it to be exactly equivalent to gambling. I think it may look a lot like luck because they make so many speculative 'bets' and so many don't pan out, but that's more a function of the vast sums the successful ones end up being given to invest combined with poor deal flow. But they still are…

That is a fascinating example of sourcing. Do you happen to have an article or source where I can read more about this?

Re: VCs Are Just Tired

#89
post #68

Earlier quoted context omitted.

I mean you’re proving my point exactly. People who have the savings to not work convince themselves that their identity is their job and do it to “keep up.” My point is that is all in your head, and if you’re going around complaining about how busy you are you then you’re doing it voluntarily and not because you will literally be homeless if you stop. $1M in a high quality REIT can generate 12% dividends, which is $1…

>> $1M in a high quality REIT can generate 12% dividends, which is $120K. Are these 12% dividends normal or sustainable? Have they continued over the years? Could you name a couple of sample names/tickers? >> A single person could easily live off half that. True -- perhaps not half but you are forgetting taxes!

You can live off $60K pre tax as a single person even in a high cost city. I don’t spend more than $3.5K a month total right now in a normal month in SF.

Taxes are not that high at that level of income.

Re: VCs Are Just Tired

#90

Earlier quoted context omitted.

I'm a fan of Miami, and I don't mean this as a dig: could you point at some venture-sized exits from Miami, especially ones that SV VCs seem to have missed/been late to?

That seems like an unfair question -- how can any city be expected to generate venture sized exits before the money even rolls in ? SF/SV have generated the exits they have after decades of continued investment.

Maybe you missed my disclaimer. The question wasn't intended as a dig, just a request for information.
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