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Andreessen Pulls a Bezos

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Re: Andreessen Pulls a Bezos

#11

Post by seibelj »

lumost wrote: post #7
seibelj wrote: post #4

Before, VC money was precious and merely being a VC was enough to get deal flow. Now, so much money has been printed and sovereign wealth / pension funds are legally obligated make 8% annual returns that their only option is to go far out the risk curve, which includes venture capital. As a consequence, VC firms are a dime a dozen and the existing ones have more capital than ever. It’s still an accomplishment to rais…

Where does a legal obligation to make 8% a year come from?

Mandates that are often backed by state law. Tax payers are then required to make up the difference if they don’t hit their targets.

A good list here https://www.nasra.org/latestreturnassumptions

Re: Andreessen Pulls a Bezos

#15

Post by jeffrogers »

I dunno. Andreessen’s service layer may make sense for some startups in some industries, but for other companies a check from the likes of Tiger might be better. And how far down the road will those services become rent?

Re: Andreessen Pulls a Bezos

#18

Post by lotsofpulp »

seibelj wrote: post #11
lumost wrote: post #7

Earlier quoted context omitted.

Where does a legal obligation to make 8% a year come from?

Mandates that are often backed by state law. Tax payers are then required to make up the difference if they don’t hit their targets. A good list here https://www.nasra.org/latestreturnassumptions

Classifying a pension fund’s expected return on assets to be a legal obligation to earn that much is a stretch.

The pension fund’s board could just as easily use a lower expected return on assets, but you are correct that using a higher than reasonable return assumption transfers debt from yesterday’s taxpayer to tomorrow’s taxpayer, and that is by design since future taxpayers are not particularly strong voting blocks. And it does cause pension fund managers to gamble on riskier and riskier “investments”, since the alternative is raising taxes and lowering return assumptions to make up for the shortfall and who likes that.

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