Y Combinator’s Garry Tan Goes to the MatRead more

Art by Mike Sullivan

From Theranos to FTX: Silicon Valley’s ‘No Additional Work Required’ Late-Stage VC Culture and What to Do About It

Photo: Art by Mike Sullivan

First, two caveats:

  • I have invested in two outright frauds in my life (to my knowledge) and lost in total a few million dollars on them. At the seed investment stage, losing around 1% to things that turn out to be frauds probably says you’re being innovative.
  • I pick on Marc Andreessen for his “no additional work required” line, which he sent to Elon Musk to confirm his nine-figure investment in Musk’s Twitter deal, because it is just too good. However:
    • I think it is incrementally more reasonable when the acquisition target is already a public entity, and
    • It is shocking, as others have pointed out, that Andreessen Horowitz wasn’t on the FTX cap table considering the way it invests. 

That said, here is why Silicon Valley has a problem investing in late-stage deals that turn out to be fraudulent.

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