Who Are My Investors? • Hacker News Board

Re: Who Are My Investors?

#121

Post by walrus01 » Sun, Oct 21, 2018, 10:12 PM UTC

On the flip side of "we don't want dirty money from ethically questionable non democratic states investing in our fund":

Things start looking really dirty, really fast when you look at what major institutional investors put money into things that are highly ethically questionable. For example a major Canadian pension fund was recently discovered to be investing in private prisons/immigration detention facilities in the USA.

https://www.theguardian.com/world/2018/oct/12/canada-pension...

Re: Who Are My Investors?

#122

Post by AnthonyMouse » Sun, Oct 21, 2018, 10:15 PM UTC

ericjang wrote: post #114

AnthonyMouse wrote: post #105

Earlier quoted context omitted.

> 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…

The distinction you're making matters at the level of individuals. If you're a person choosing a startup to dedicate years of your life to, the choice you make has major consequences for you.

At the level of a huge wealth fund, those details are noise that gets canceled out because the more promise a startup has the more capital dollars are chasing it, so the buy in price is proportional to the value. Arguing that investments aren't fungible is essentially arguing that the efficient market hypothesis is wrong. (Which it can be, but not in a way that seems particularly relevant here.)

Re: Who Are My Investors?

#123

Post by tw1010 » Sun, Oct 21, 2018, 10:24 PM UTC

Founders should take into account the dirtiness of the investment commensurate with how much leverage they have. But we shouldn't ostracise or penalize small companies who can't afford to take into account where the money comes from. No need to enforce an equally high ethical threshold on the whole startup community.

Re: Who Are My Investors?

#124

Post by ericjang » Sun, Oct 21, 2018, 10:27 PM UTC

AnthonyMouse wrote: post #122

ericjang wrote: post #114

Earlier quoted context omitted.

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…

The distinction you're making matters at the level of individuals. If you're a person choosing a startup to dedicate years of your life to, the choice you make has major consequences for you. At the level of a huge wealth fund, those details are noise that gets canceled out because the more promise a startup has the more capital dollars are chasing it, so the buy in price is proportional to the value. Arguing that in…

Fungibility can hardly be true for the venture capital ecosystem. Many people who wanted to invest in Facebook, Snap, Uber, etc. could not do so.

Founders of highly successful startups (or at least those on a promising growth trajectory) are in practice sensitive to which VCs participate in each round (and I suspect in the next few years they will start to pay attention to LPs as well). The "buy-in" price that you mention is not efficient because some people cannot participate no matter how much they are willing to pay.

Similarly, imagine if Uber wanted to hire a top Computer Vision researcher, and they could not. This hiring situation might not even get noticed by a LP, but an LP would surely notice if a VC was not able to invest their money in the next Uber / Facebook.

Re: Who Are My Investors?

#125

Post by ed_balls » Sun, Oct 21, 2018, 10:46 PM UTC

samsonradu wrote: post #118

ssijak wrote: post #90

Earlier quoted context omitted.

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.

Unless you want to send a message, not just kill someone. Similar to Skripal.

Re: Who Are My Investors?

#126

Post by ed_balls » Sun, Oct 21, 2018, 10:50 PM UTC

abalone wrote: post #120

nafey wrote: post #68

Earlier quoted context omitted.

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.

I guess China wasn't an option?

Re: Who Are My Investors?

#127

Post by whatusername » Sun, Oct 21, 2018, 10:51 PM UTC

TAForObvReasons wrote: post #99

y4mi wrote: post #93

Earlier quoted context omitted.

You don't have to address every wrong you did in order to start doing right. It's never black and white with people.. and you're not actually looking at the real problem if you're unable to see the nuances.

> It is time for all of us in the startup and VC sector to do a deep dive on our investor base and ask the question that the CEO asked me. Who are our investors and can we be proud of them? And do we want to work for them? I would extend that question even further: Can we be proud of the gains we've made by working with the investors we've dealt with in the past? If not, how are we addressing the problem? You can't b…

Except there’s a very large gap between:

* corrupt entity A gave me $X

And:

* corrupt entity B bought Y from me at price $Z at essentially market value.

The amount to return in the first case is obvious. The second is much less clear (since the cash was essentially fungible)

Re: Who Are My Investors?

#128

Post by rhizome » Sun, Oct 21, 2018, 10:57 PM UTC

y4mi wrote: post #93

TAForObvReasons wrote: post #79

Earlier quoted context omitted.

Until he comes out and says "we made $X from doing business with questionable entities, and here's how we gave back $X without lining our pockets", it's posturing.

You don't have to address every wrong you did in order to start doing right. It's never black and white with people.. and you're not actually looking at the real problem if you're unable to see the nuances.

You don't have to address every wrong you did in order to start doing right.

By the same token, talk is cheap. AKA "ideas are worthless by themselves."

Re: Who Are My Investors?

#129

Post by bigiain » Sun, Oct 21, 2018, 11:00 PM UTC

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…

> nothing meaningful has changed

Except that you don't now have blood on your hands...

If "being able to sleep at night" gets counted as "meaningful", I'd say something has changed.

If the only question you count as "meaningful" is "did we leave any money on the table". Perhaps you should think more deeply about the world...

Re: Who Are My Investors?

#130

Post by AnthonyMouse » Sun, Oct 21, 2018, 11:04 PM UTC

ericjang wrote: post #124

AnthonyMouse wrote: post #122

Earlier quoted context omitted.

The distinction you're making matters at the level of individuals. If you're a person choosing a startup to dedicate years of your life to, the choice you make has major consequences for you. At the level of a huge wealth fund, those details are noise that gets canceled out because the more promise a startup has the more capital dollars are chasing it, so the buy in price is proportional to the value. Arguing that in…

Fungibility can hardly be true for the venture capital ecosystem. Many people who wanted to invest in Facebook, Snap, Uber, etc. could not do so. Founders of highly successful startups (or at least those on a promising growth trajectory) are in practice sensitive to which VCs participate in each round (and I suspect in the next few years they will start to pay attention to LPs as well). The "buy-in" price that you me…

> Fungibility can hardly be true for the venture capital ecosystem. Many people who wanted to invest in Facebook, Snap, Uber, etc. could not do so.

Many people who want to invest in Amazon right now cannot do so, because the shares are very expensive. That doesn't mean they're not fungible, it only means the existing owners won't sell for what you're willing to pay.

> The "buy-in" price that you mention is not efficient because some people cannot participate no matter how much they are willing to pay.

If you went to Zuckerberg in 2004 and offered to buy in for the equivalent of Facebook's 2018 valuation, would he really have turned you away?

Early stage startups are sensitive to who invests because early investors typically get seats on the board. The problem with the Saudis was not that they would use their board seats to ruin your company.

> Similarly, imagine if Uber wanted to hire a top Computer Vision researcher, and they could not. This hiring situation might not even get noticed by a LP, but an LP would surely notice if a VC was not able to invest their money in the next Uber / Facebook.

The thing about "the next Uber / Facebook" is that nobody knows who they are yet. And the number of startups who could be them is huge, even though most of them won't. Not being able to invest in a random startup that might become the next Facebook is hardly an issue when there are a hundred more that you can.