11–20 of 22 posts
Side note that the 3x return companies are the biggest headache to manage (founder feuds, recruiting another vp of sales, etc). The 0x and 100x companies are much easier
I suspect that they are going to proceed a bit differently when doing due diligence on this type of investment going forward.
I might refine the question along the lines of, do losses in a given fund put pressure on the GP's appointed board members in their other companies in the same vintage or with the same participating LP's - to cause the CEOs to align their strategies toward nearer term exits - and if that strategy shifts, how does it affect staff in those companies?
Though it's true that "companies aren't sold, they are bought," I could tell you how companies under different kinds of market pressures and investment structures tend to make product and engineering decisions and what those incentives do to the culture, but that's outside the scope of whether this particular loss creates enough systemic risk that it could ripple out into their other portfolio companies.
Side question I've been wondering: what was Sequoia, a well-respected VC, doing investing in companies that do nothing but enable people to trade speculative assets with no track record? I'm not so worried about Fundrise or Robinhood because those assets are at least useful or Masterworks because art has a track record. Maybe it's because prospective LPs had the same crypto fomo as retail speculators, but don't GPs a…
Side question I've been wondering: what was Sequoia, a well-respected VC, doing investing in companies that do nothing but enable people to trade speculative assets with no track record? I'm not so worried about Fundrise or Robinhood because those assets are at least useful or Masterworks because art has a track record. Maybe it's because prospective LPs had the same crypto fomo as retail speculators, but don't GPs a…
Sequoia is well respected because they invest and generate returns for their investors, not for displaying any kind of morals.
Earlier quoted context omitted.
Sequoia is well respected because they invest and generate returns for their investors, not for displaying any kind of morals.
It's not the morals I'm wondering about; it's the viability of the businesses. Investing in one of these companies is hoping you can cash out before the bubble pops. At least if you invest in a boring SaaS company, when the bubble pops, you might still have a boring SaaS company on the road to profitability.
Purely on intuition and no facts at all: my intuition is that it’s already baked into their risk profile. They don’t need to “make up for it.”
Sounds like you're ready for VC!
Earlier quoted context omitted.
It's not the morals I'm wondering about; it's the viability of the businesses. Investing in one of these companies is hoping you can cash out before the bubble pops. At least if you invest in a boring SaaS company, when the bubble pops, you might still have a boring SaaS company on the road to profitability.
If an exchange isn't misappropriating customer funds, it doesn't matter if the bubble pops. They facilitate transactions and take a fee in return. As long as they have customers and don't blow money all over the place, they should be profitable.