Venture Capital - Silicon Valley Ponzi Scheme - Chamath Palihapitiya
MAK - Mudassir Akber Khan1 HN recommenders · 2020–2023
309K views · interview · evergreen · Uploaded 2019-11-12
A 13-minute clip from This Week in Startups in which Chamath Palihapitiya describes venture capital as a Ponzi-like scheme driven by fees and inflated valuations among VCs.
Cited in threads about startups, VC and private equity as an insider's description of how VC economics work, though commenters note he is self-serving.
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6 comments from Hacker News
It seems that a lot of VC is a multivariate ponzi scheme of sorts, which might explain some of it. If they're making fees regardless, then they just need to show/push fast initial growth to attract more layers of investment and it doesn't necessarily need to make long term sense. Chamath Palihapitiya describes this here: [VIDEO]
VCs also get paid by getting other VCs to evaluate their companies as more valuable in a sort of Ponzi scheme: [VIDEO]
Let's not ignore the 'minor' detail that the entire space is a ponzi scheme to begin with (coming from Chamath Palihapitiya; a billionaire who was one of the first Facebook employees): [VIDEO] And let's not ignore that the entire financial system within which this ponzi scheme operates is also a giant ponzi scheme: [LINK] So the startup world is literally a ponzi scheme within a ponzi scheme.
> all this money and all this failure, its going to end badly, these investors are gonna get burnt No, I think all these startups employees with families to feed are going to be out of a job. VCs fund startups that shouldn’t have been funded in the first place. They create a market that artificially props up unsustainable businesses. This video is a good explanation of how the VC world actually works. [VIDEO]
Not a new understanding. Chamath Palihapitiya talked about this in 2019, and others before then although I don't have references. [VIDEO] Warning, video is self-serving but simplistically, this is part of it. To be clear, the VCs understand what they are doing. They aren't fleecing themselves.
Yeh he was setting up another funding funnel MS -> OpenAI -> his AI chips [VIDEO] Make it appear on paper like there’s proper separation of concerns but really building a web to form monopoly with MS’s backing because they can’t get in trouble if some startup is doing it. Just more shell company games to play the system, screw everyone else by using their churches to claim dominion over all of tech. These guys are too obvious now. The elders who don’t know better are dying off leaving behind a more technically literate voter base.