111–120 of 451 posts
how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?
This end of the era of easy money is going to reveal that many of the "geniuses of our time" are nothing of the like.
how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?
That's one theory. Of course, given the depth of financial depravity on display here and the incredible thinness of the financial defense, one must also entertain the theory that they did do the due diligence, they were aware of how dangerous this was, and they invested anyhow for other reasons. And that those reasons are probably not good. There have been many cases where companies go to great lengths to do accounti…
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,”
And this is the same man who oversaw the liquidation of Enron.
"Ray said he had found at FTX international, FTX US and Bankman-Fried’s Alameda Research trading company “compromised systems integrity”, “faulty regulatory oversight” and a “concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals”.
how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?
I have the same question. My best guess is that these VCs need to deploy so much capital that they don't really do due diligence, instead they go by "founder vibes" and "vision", a watered down version of "invest in the team, not the product". Sequoia, SoftBank, a16z all seem to be guilty of this. Anecdotally, Chamath Palihapitiya, in the recent All-in Podcast [0], said that they met with SBF and as a condition to in…
They have loose morals.
Kevin O'Leary, of Dragon's Den fame, who is now a creditor in the FTX bankruptcy (ie wiped out) recently said in an interview that he would invest with SBF again.
The guy literally had money stolen from him. How do you even explain that?
how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?
The due diligence is about the founder's connections and the ability to use them to skirt regulatory oversight. This checked out - both Sam and his girlfriend came from well-connected families and so far acted the part (including the massive political donations). Whether it's going to save them remains to be seen. I hope we won't sink to a new low of bailing out Ponzi schemes with taxpayer money, but I wouldn't be surprised too much.
Earlier quoted context omitted.
They weren't investing on fundamentals, the books didn't matter. His close association and largesse with regulators, media, and politicians along with his cloak of EA made regulatory capture and the promise of monopoly-like profits possible. VC's aren't stupid, even if they thought it was 80% likely he was an outright fraud, it's still worth the bet for a 20% chance at 50-100x returns.
It's strange to see EA credited as both the reason for why this went on for so long with no oversight, and then damned in a 'ding dong the witch is dead' manner after it fell apart. When a confidence man and thief loudly and proudly shouts out a religious affiliation as his guiding star, we generally don't go ahead and condemn the religion for his behavior. (Doing so is a great way to get canceled. At most, we blame…
they were probably going to give them to the homeless ...
I would guess that the accounting firm that did the audit will be going the way of Arthur Andersen after the Enron scandal. And how many of their clients also have "interesting" financials?
Can't make this stuff up. https://www.coindesk.com/business/2022/11/11/meet-the-metave...