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Startup Boom a “Dangerous, High-Stakes Ponzi Scheme”: Chamath Palihapitiya (wolfstreet.com)
39 points by SQL2219 74 days ago | hide | past | web | favorite | 5 comments

Venture capital can be the driver behind the early demise of a company. Investor goals are rarely, if ever, fully aligned with founder or even company goals.

In the end, VC money seems to benefit very few startups - - and now, even fund investors.

I say this as a former wannabe who was forced to bootstrap a SaaS company because I couldn't raise a round. It's been wild to see companies in my space that did raise money and are either no longer in business, were forced to pivot to a business investors liked better, or forced to sell (acquihire) because the pressure from the money they took on.

We’ve exhausted growth via globalization, professionalization, and IT. Most of the arbitrage is gone. What’s left is an innovative edge. Take Monsanto which bought Climate for $1b when it had $30m in revenue. People thought it was crazy at the time but along comes Bayer (and Monsanto’s digital assets and the optionality and future proofing this brings) command a $5b - $10b premium. Companies are no longer able to (or unwilling to) do internal innovation and so you need to outsource that — and those R&D budgets represent hundreds of billions of dollars, but even better you only pay for the winners. We’re going to look back in 10 years and realize we could have been investing a lot more in venture capital. Yes, the asset class has lagged but there’s a whole universe of offline companies that are just now coming into the market. Every company will need to be a tech company and companies just don’t have the DNA to do it themselves. As long as CAC << NPV(LTV) then yes you should spend.

'Companies are no longer able to (or unwilling to) do internal innovation and so you need to outsource that' I'm assuming you only mean huge, mature enterprises here.

There's a great future in plastics. Think about it.

This sounds great. Where is it?

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