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One of Silicon Valley's Most Esteemed VCs Says Startups Are 'Mostly Crap' (vanityfair.com)
An anonymous reader cites an article on VanityFair: Former Facebook employee Chamath Palihapitiya won't pull punches when it comes to lame tech companies. Palihapitiya's firm, Social Capital, has backed numerous tech companies with valuations in the billions, such as Slack, Box, and SurveyMonkey. But that doesn't mean that he is bullish on unicorn culture. He says "Most of those businesses are fundamentally not good, they're poorly run, and they never should have been invested in in the first place. But the capital came in because the person who had control of the capital was able to justify it intellectually to themselves versus something else that could have become the next Facebook or Google. [...] The reality is, great companies can go public in any market. When we talk about the I.P.O. slowdowns what we're really saying is that there really just aren't that many good companies being built. We need to divorce ourselves from venture capital as an occupation and focus on using capital as a way to take really big bets on things that just seem totally audacious. Right now we haven't done enough of that, and the result is that most of the things we've funded are mostly crap and largely worthless."
It's a bubble, and now it's deflating because, like the mortgage-backed certificates, the underlying assets are crap.
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
Didn't Sturgeon already tell us this 75 years ago? Ninety percent of everything is crap, including VC's.
We hope your rules and wisdom choke you / Now we are one in everlasting peace
He's making a ton of money, while saying that people are overpaying him for crap he bought earlier for less. Of course, he's still selling it to them.
I consider it the equivalent of the poker pro telling everyone he makes a living at this and (some standing backing that up) when he sits down at the table. Just fair warning that someone is going to lose money, and he has the skills for it not to be him.
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Look, the numbers for new businesses are always crap - that's why you get the high returns.
For every 10 businesses you start, seven go out of business in the first year. One more squeaks along till the 2nd year, another becomes a 'viable loss' (i.e. they make money, but less than their owner could earn if they got a job working for a major corporation), and only the last one makes any money. But that last one will make so much money that the owner becomes wealthy
That show VC works - they invest in 10 start ups, one of them gives them a return on their investment that is 20x, or 100x how much they gave it, and they go away happy. The other 9 they invested in are just the cost of doing business.
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