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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

#61

Post by bombela »

refurb wrote: post #55
sqeaky wrote: post #38

Earlier quoted context omitted.

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.

At least a thousan here.

Palo Alto Park Mutual Water Company, deserving about 600 houses, in the middle of the Silicon Valley. Water is not potable.

I have an extensive filtration system for making it potable. It is expensive, but the convenience is worth it as I can afford it. My neighbor has to go out refill 18L jugs for his drinking supply.

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

#62

Post by A4ET8a8uTh0 »

rnk wrote: post #45
nyrulez wrote: post #20

Earlier quoted context omitted.

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.

This sub-thread is very amusing. All you people saying if it was fraud there would be lawsuits. Guess what, there are tons of lawsuits against these companies and also settlements. And vc doesn't care! Look at the genius. Look at WeWork and Adam Neumann. Many people saw it was impossible to make money and meet their valuation.

This and small time fraud does not even make it to a police report..

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

#63

Post by xg15 »

Well yes, the facts that the support structure for the proposed bridge would be mostly made of rusty scrap metal and zip ties and that the engineering team consists solely of Bob who has watched a YouTube video on bridge building once (but has a very good memory) absolutely do constitute red flags.

However, for an investor, a red flag is first and foremost just a piece of information. To make use of it, he must put it into a proper, objective context: Such as that we readily accept bridges made out of wood and ropes on our playgrounds - or that model railroad enthusiasts successfully used cardboard as a bridge-building material for decades.

Then the information must be weighed against expected rewards and mitigating factors, like the expected toll revenue before collapse or the fact that the location is close to the Mexican border, so everyone affected can quickly leave the country, should the need arise.

Only after carefully weighting all those pieces of information can an investor make an informed decision.

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

#64

Post by blitzar »

bobthepanda wrote: post #60
blitzar wrote: post #59

Earlier quoted context omitted.

> 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.

And they "left" a Cadillac with $200,000 cash in the boot on the driveway of the person making the planning decisions.

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

#65

Post by hd95489 »

maxbond wrote: post #56
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).

Maybe, but failing to turn lead into food isn’t technically fraud. It’s just an inability to mature the technology into a viable long term product. Happens all the time with crypto, jucero etc. Movie pass was probably too close to Fraud though and risked clawback

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

#66

Post by blitzar »

xg15 wrote: post #63

Well yes, the facts that the support structure for the proposed bridge would be mostly made of rusty scrap metal and zip ties and that the engineering team consists solely of Bob who has watched a YouTube video on bridge building once (but has a very good memory) absolutely do constitute red flags. However, for an investor, a red flag is first and foremost just a piece of information. To make use of it, he must put i…

The red flag in Bobs project doesn't mean you can't make money out of an investment in this project.

Bob has secured ownership of the section of river and a contract with the local town to pay bob 100k when he connects the two sides of the river together. He just needs an investment of $1,000 in exchange for 10% of his company - (to buy the zip ties) - so he can get started with construction.

Looks like at least a 10 bagger, the investment committee is going to absolutely love Bob - I LOVE THIS FOUNDER! 10 out of 10! Might even be able to make more if Bob doesnt make it to the other side of the river and you can sell him off in an acqui-hire to someone looking for their very own Bob.

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

#67

Post by OnlineGladiator »

xboxnolifes wrote: post #48
OnlineGladiator wrote: post #4

> Remember: Red flags are very rarely outright fraud, and when they are, it’s often obvious only in hindsight...Look at Enron! Look at Madoff! The author's two examples of obvious fraud were called out by many people as fraudulent years before it became public knowledge. It's possible to do your own research and conclude the zeitgeist is wrong before it becomes common knowledge. It would make the argument stronger to…

If you look hard enough, there is always someone disagreeing/yelling fraud/etc about every topic that is big enough/mainstream enough. It's only hindsight that shows whether your research showed something was obviously fraud.

Do you have any examples to back up your claim? Because I already debunked the examples the author gave.

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

#68

Post by kh3dron »

sqeaky wrote: post #41
kh3dron wrote: post #3

This article says absolutely nothing of substance. It takes no side and makes no argument. "some things look like red flags. maybe that's ok. maybe it's not. someone, somewhere, will figure it out eventually." Paul Graham's blog and its consequences have been a disaster for the human race.

Is it almost as if nuanced topics require judgement instead of taking sides.

So what's this blog post about? is "nuanced topics require judgement" a thesis? Why write anything if you have nothing to say?

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

#69

Post by sqeaky »

refurb wrote: post #55
sqeaky wrote: post #38

Earlier quoted context omitted.

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.

The entire city of pittsburg has ongoing lead in tapwater scandals. To a lesser extant so has the entire state of Milwaukee.

That is already millions, but...

Flint still has problems. Brady Texas has radium, Washington DC has intermittently had Lead. It is entirely on well owners to test and maintain their own water. New Jersey leads the country in BPA in water, some of which is safe, but the advice is to check with each municipality if it is safe....

And so on for all kinds of places and reasons. We just don't take tap water seriously as a country even though it wouldn't be a hard problem for us to solve.

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

#70

Post by sqeaky »

Red_Leaves_Flyy wrote: post #57
sqeaky wrote: post #37

Earlier quoted context omitted.

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.

I agree. At least 1 person in this thread got it wrong and it could have been me.
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