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A messaging app startup that raised $200M shuts down afters users were 95% fake

fortune.com

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Re: A messaging app startup that raised $200M shuts down afters users were 95% fake

#141

Post by fakedang »

gfdsgfsdgfs wrote: post #133
gizmo wrote: post #57

Earlier quoted context omitted.

VCs don't invest their own money. VCs are paid a percentage of the money they invest in startups. As a result VCs only care about the quality of the investment they make insofar it helps them raise more money in the future. Because more money = more fees. VCs care about technology sometimes, but not always. If a startup doesn't grow because their tech is bad that's something VCs care a lot about. If a startup grows f…

This is not true. VC general partners do invest their own money.

Yeah,like sub-5% of the fund size.

Re: A messaging app startup that raised $200M shuts down afters users were 95% fake

#142

Post by suction »

cyanydeez wrote: post #126
jarym wrote: post #101

> “Oh, man, the number of times I’ve been asked why my company isn’t growing as fast as X and then found out X was a fraud all along.” This, in sports, finance, startups - everywhere. Dirty players skew the dynamics of any system leading to worse outcomes for those that choose to remain honest. We need the supposed ‘smartest guys in the room’ to be less dumb and do due diligence and we need strong consequences for fo…

Welcome to wealth inequality consequences #356433

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Re: A messaging app startup that raised $200M shuts down afters users were 95% fake

#143

Post by lambertsimnel »

vkou wrote: post #132
rvba wrote: post #127

Earlier quoted context omitted.

"In the good times" when dollar was backed by gold, bankers would borrow at 3%, lend at 6% and go to a golf course at 3 o'clock. The economy is working incorrectly - due to central banks. Being punished for saving is just insane.

> Being punished for saving is just insane. The economy is a prisoner's dilemma. If everyone saved , we'd all be worse off. As such, it makes sense to punish defectors.

Doesn't that depend on what you mean by "if everyone saved"? If everyone saved to the exclusion of entrepreneurial activity, we would indeed all be worse off. However, we'd all be just as badly off if everyone bought stocks to that extent.

On the other hand, if everyone saved instead of buying stocks, wouldn't banks and entrepreneurs have a common interest in making loans replace stocks in funding entrepreneurial activity?

Re: A messaging app startup that raised $200M shuts down afters users were 95% fake

#144

Post by mahmoudimus »

CharlieDigital wrote: post #44
valianteffort wrote: post #8

Are softbank actually the biggest idiots in VC? It almost seems like everything they invest in is a handshake deal built on "just trust me bro" numbers.

I have brought this up in another comment, but my experience in the VC world is that it operates too heavily based on 4 types of "trust": 1) Institutional trust (Stanford, Harvard, MIT, "ex-FAANG", "ex-McKinsey", etc.), 2) Social trust (someone you know that has already established one of the three other kinds of trust), 3) Serial trust ("3-exits", "former CEO/CTO/VP of..."), and 4) Transitive trust ("Sequoia investe…

100% this. Ranked in order, it would be: #3, #2, #1, and #4.

- #3 is king. If you have a track record, trust comes quickly.

- #2 is probably how 80% of investors invest.

- #1 is when an investor takes a bet on an unproven entity (i.e. precursor to #3)

- #4 is a bad investor, most likely a lemming. do not give them any power. they are dumb money with an investment strategy of "playing with the house"

Re: A messaging app startup that raised $200M shuts down afters users were 95% fake

#147

Post by blueboo »

rossjudson wrote: post #47
CharlieDigital wrote: post #44

Earlier quoted context omitted.

I have brought this up in another comment, but my experience in the VC world is that it operates too heavily based on 4 types of "trust": 1) Institutional trust (Stanford, Harvard, MIT, "ex-FAANG", "ex-McKinsey", etc.), 2) Social trust (someone you know that has already established one of the three other kinds of trust), 3) Serial trust ("3-exits", "former CEO/CTO/VP of..."), and 4) Transitive trust ("Sequoia investe…

I've always had this background thought that it would be a fun job to do "due diligence" on behalf of VCs. I remember being on the receiving end of some of that work, and I wasn't all that impressed. Do today's VCs take technical due diligence seriously? If not, why not?

They do but it’s a matter of time constraints. Pace. Deal flow. Take too long to scrutinise a good thing and it’ll be snapped up from under you. The group that poached might have even less time to do proper due diligence. VCs tap expertise for due diligence in all sorts of mostly-informal ways. But for proper, compensated investigations there’s almost never enough time to build a case you’d stake your reputation on
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