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There are no (absolute) red flags in venture capital

blog.aaronkharris.com

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Re: There are no (absolute) red flags in venture capital

#51

Post by akiselev »

nyrulez wrote: post #20
Apocryphon wrote: post #17

Earlier quoted context omitted.

Aren't those clearly frauds for the people participating, but as businesses they're just somehow structured in a way to be sound investments for those on the outside?

If those were frauds, there would be ton of lawsuits by now given their history. It may or may not be immoral for participants, but illegality is a much higher bar.

There were. Lots of them.

So much so that both Herbalife and Amway have been under numerous consent decrees with the US government for decades [1][2].

[1] https://www.ftc.gov/news-events/news/press-releases/2016/07/...

[2] https://www.govinfo.gov/content/pkg/FR-1994-03-23/html/94-67...

Re: There are no (absolute) red flags in venture capital

#52

Post by yieldcrv »

sqeaky wrote: post #42
yieldcrv wrote: post #33

Earlier quoted context omitted.

I was going to write "not male presenting" but nobody would see the comment with that much polarization

You were fine with racism but not sexism? That was the line. Or was it somehow a joke or satire even though many of us have heard exactly that message in a serious context before?

the line was that "woman" wasn't accurate enough, cis-man dilutes the number of people that would listen, male wasn't accurate enough either, and male presenting was closest but even more obscure regarding what I'm actually talking about it

Re: There are no (absolute) red flags in venture capital

#53

Post by yieldcrv »

luckylion wrote: post #47
laurex wrote: post #39

Earlier quoted context omitted.

While tempted to say something snarky here (for example, “wait for it….”) I’ll just say that this comment makes zero sense to me. There is widely-available evidence that women-founded startups receive less than 2% of Venture funding. That one person VCs saw as “pattern-matching” enough to get funding was huckster doesn’t say anything about women’s general competence, nor paints a great picture of how VC funding is al…

"red flag" = no deal. If "being a woman" meant you can't get a deal, there wouldn't be any women who get funded. That women-founded startups receive very little funding overall is also not surprising: there are very few of them (startups being defined narrowly: a company focused on hypergrowth and using VC). What do you expect, women founding x% of startups but getting x*10% of funding?

not quite

the low distribution isn't distributed across every VC portfolio, its across ALL VCs. which means that for MOST VC's, it is absolutely a "no deal", so far.

we are completely aware that most of the decision makers don't consider themselves as racist and sexist in their hearts and minds, we are also completely aware that their reasoning lacks any meritocracy or quantitatively better investment outcomes, while also having outcomes that shut out demographics by race and sex.

Re: There are no (absolute) red flags in venture capital

#54

Post by hd95489 »

“ No sane person is going to invest in a scheme to turn lead into gold, but early-stage startups—and even some mid- and late-stage startups—rarely present such a clear-cut profile”

Why not? If the founder is sufficiently charismatic, huge followers and lots of suckers willing to pile in. Sure the odds of a real product are zero but odds of a 100x exit are non zero. It may be a decent enough investment dispite being outright fraud. If you think you are in early enough in the scam and you can get out.

Re: There are no (absolute) red flags in venture capital

#55

Post by refurb »

sqeaky wrote: post #38
oh_sigh wrote: post #26

Earlier quoted context omitted.

Bottled water is a bizarre example to pick for price gouging of food, since water is available for essentially free for almost everyone in America. When it has a cost it is measured in $/kilogallons not $/liter

I suspect it was picked because for millions of American's tap water is not safe to drink.

Please list the millions?

Unless you mean temporary boil water orders of which Canada has several dozen active right now.

Re: There are no (absolute) red flags in venture capital

#56

Post by maxbond »

hd95489 wrote: post #54

“ No sane person is going to invest in a scheme to turn lead into gold, but early-stage startups—and even some mid- and late-stage startups—rarely present such a clear-cut profile” Why not? If the founder is sufficiently charismatic, huge followers and lots of suckers willing to pile in. Sure the odds of a real product are zero but odds of a 100x exit are non zero. It may be a decent enough investment dispite being o…

You may well have to give that money back however (eg, early investors with Madoff had to compensate later investors decades later).

Re: There are no (absolute) red flags in venture capital

#57

Post by Red_Leaves_Flyy »

sqeaky wrote: post #37
Apocryphon wrote: post #17

Earlier quoted context omitted.

Aren't those clearly frauds for the people participating, but as businesses they're just somehow structured in a way to be sound investments for those on the outside?

They are, and that's the joke.

Sadly, real people say stuff like that seriously. Without anything else to go on it would be unwise to assume the authors beliefs. /s is a helpful way to show that one is being sarcastic and not a serious ignoramus during online discussions that lack other communication channels like body language or inflection.

Re: There are no (absolute) red flags in venture capital

#58

Post by luckylion »

yieldcrv wrote: post #53
luckylion wrote: post #47

Earlier quoted context omitted.

"red flag" = no deal. If "being a woman" meant you can't get a deal, there wouldn't be any women who get funded. That women-founded startups receive very little funding overall is also not surprising: there are very few of them (startups being defined narrowly: a company focused on hypergrowth and using VC). What do you expect, women founding x% of startups but getting x*10% of funding?

not quite the low distribution isn't distributed across every VC portfolio, its across ALL VCs. which means that for MOST VC's, it is absolutely a "no deal", so far. we are completely aware that most of the decision makers don't consider themselves as racist and sexist in their hearts and minds, we are also completely aware that their reasoning lacks any meritocracy or quantitatively better investment outcomes, while…

> the low distribution isn't distributed across every VC portfolio, its across ALL VCs. which means that for MOST VC's, it is absolutely a "no deal", so far.

Again, that's expected, given there's few women founding startups and seeking VC. Of course, for each individual woman it'll feel different because they are a woman and have founded a startup and want VC funding and might not get it. But that's not different from how men experience it. Most of those don't get funding either, but if you only look at those who do get it and say "see, those are more", you (willfully) ignore all those who don't. You're comparing "men who successfully raised VC" to "all women who tried raising VC".

Re: There are no (absolute) red flags in venture capital

#59

Post by blitzar »

carom wrote: post #18
addHoax wrote: post #2

The red flag inherent to venture capital is venture capital. Society recently felt government accountable to the range and gradient of human conditions was immoral so it changed the rules to let private power pick and choose and private power is pricing everyone out of homes and food, which is apparently quite moral. Nevermind the state of reality we leave behind for the future; we’ll be dead. Those old religious met…

>private power is pricing everyone out of homes Last time I checked it was the government preventing me from building more dense housing as well as requiring parking minimums.

> Last time I checked it was the government preventing me from building more dense housing

Mega-corp didnt have problems with getting approval (and a healthy cash grant to build it) for the exact same application. I wonder what they did differently?

Re: There are no (absolute) red flags in venture capital

#60

Post by bobthepanda »

blitzar wrote: post #59
carom wrote: post #18

Earlier quoted context omitted.

>private power is pricing everyone out of homes Last time I checked it was the government preventing me from building more dense housing as well as requiring parking minimums.

> Last time I checked it was the government preventing me from building more dense housing Mega-corp didnt have problems with getting approval (and a healthy cash grant to build it) for the exact same application. I wonder what they did differently?

Simple: they actually benefit from the status quo. If only a very limited land supply is available for densification (say like maybe 5% of the city) then that land supply is fairly easy for a few players to corner.
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