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All I hear is how every founder who made it is an angel who is just better than everyone else, how all of them did it because you can too. Even here, I cannot fully say that I suspect that there is some chance that a lot of new-age tech firms likely cut deals with governments that we have zero clue about and how many of them can be astroturfed.
I did not want to believe it because I started reading PGs essays and thought that startups were the only fair thing in the world, how you cannot get ahead here without being super honest about everything, how everyone else is that way, how these are the saviours of humanity. Saying that Musk or Gates or Jobs may have actually done a whole bunch of shady shit that we conveniently wish to pretend could not have happened was my frame. I will get downvoted and get called a frustrated negative loser here, even though I hope Charles is incorrect. The idea that a lot of them happen to have fairly rich families that somehow did have connections with various agencies or services adjacent to them does seem fishy. Alexey Guzey made a post about Nobel prize winners and all their parents mostly worked white collar jobs like academics, engineers and maybe business owners but very few were active in politics.
Even in the case of Elizabeth Holmes, Theranos ran for years with VCs head of national agencies in the board and somehow never asked for a working white paper or patent, or how Adam Neumann raised money from a16z despite causing a lot of loss to people with his wework stuff. PG lies to people about how uni does not matter yet YC favors your undergrad and past experiences a lot more than most jobs do. Adam Neumann fucked innocent people over who lost money and jobs because of weworkm somehow he is still a better person than everyone else.
Last week on a thread before the elections got over I joked about voter fraud at which point I got a reply from a guy asking for substantial proof. This is the same thing as casting couches, if you actually investigate this stuff, it is very hard to prove as defection means punishment, with the P Diddy stuff, many who got raped by him will likely never come and accept it. How is it that most large crypto projects (exchanges) somehow have extensive money laundering issues to the point where if you run one, you likely fail jail sentences because you implictly either helped or rugpulled people
I don't want to be a conspiracy nut who thinks CIA or aliens or "the jews" run the world and do everything good or bad. The idea that there is still far more corruption in everything, especially startups, where the extent of the rot is sealed pretty well behind the personalities of founders and VCs who LARP as thought leaders whilst writing blogs that would make my incoherent ramblings look sane should make you suspcious.
In the case of Elizabeth Holmes, I think people were desperate for a female Steve Jobs. Don’t forget she never got significant amounts of VC money; she got the funds from blinding politicians and supermarket CEOs with science.
Great point, andreessen did support her but never invested money. Regardless, it's strange to raise 100s of millions without a working prototype for a single valuable feature for a firm that existed for close to a decade.
Wework, broadcast.com, ftx are some high profile blow ups but mostly VCs don't invest like dumbasses. Even if I were to believe that openai or something has obvious shady ties and origins and or founders of their backstories etc, they still made a ton of money. Not alleging that but I mean to say that even in such conditions, most people make money at least via valuations or exits and that most founders aren't scheming people, just that the probability of top top dogs doing this stuff seems high to me.
Oh, I’m sure the backstage can be pretty grim, I’ve heard bad things about VCs.
They had a prototype that seemed to work (with faked results) and legitimately did work for a few tests. Holmes’ genius was getting stuffy septuagenarians into such a bidding war that they overruled their own analysts who said the prototypes were insufficient and urged caution.
Were there shenanigans behind that? I don’t know. Possibly. But I think it would have come up in the investigation along with all the other criminal stuff that was going on. Did you read Bad Blood? It’s a fantastic book.
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I think it's worth pointing out that the companies you named aren't exactly comparable. Taking them one by one:
Theranos was a fraudulent company that made an ineffective product, lied about its effectiveness, faked demonstrations and test results, and not only parlayed that into a ton of VC funding. The weird thing about it is that they nonetheless plowed forward by entering into contracts with large retailers that they couldn't possibly deliver on, and the whole operation was soon revealed as a sham.
FTX was a legitimate investment firm that fraudulently mishandled client funds. Years ago, my grandparents were victims of a similar fraud when their investment manager was telling them he was investing their money in the market but was really using it to make loans to his son's woodworking business. When the woodworking business couldn't cover the loans, he didn't have the money for investors withdrawing funds, eventually someone called the DA's office, and the guy was convicted and died in prison. This guy was a legitimate locally trusted investment manager that normal people used, not some obvious fraudster. When rumors started circulating that he was crooked, a lot of people, including my parents, pulled their money out, but my grandparents had been investing with him for years and said they trusted the guy.
WeWork was a legitimate company that was able to hype itself into a valuation so high it defied common sense. It was effectively a commercial real estate company that marketed itself as a tech company. The estimated valuation was so high leading up to the IPO that investors realized there was no real room for growth, not to mention that they were losing more money than could be reasonably explained. There were some questionable valuation processes (e.g. counting every desk job in a city where they were operating as a potential customer rather than a more reasoned analysis of the market for ad hoc office space), but none of this was exactly secret.
Broadcast.com was a successful company that Yahoo ran into the ground after acquiring it for a lot of money. I don't even know why it's included here because it was well past the VC stage at the time of purchase and it's just another failed acquisition.
So of the four companies, Theranos was the only one that engaged in fraud to attract VC money. FTX engaged in fraud to prop up another business. WeWork used non-fruadulent puffery to attract investment, and Broadcast was badly managed by a corporate giant.
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