> You follow whatever the hype is and bail after you get your desired return.
> There’s a desire for other investors to be a sucker that holds the bag at the end.
I agree with everything you said except for these two sentences. If you take VC funding to build a sustainable business frankly you’re doomed from the get go. That’s not what a VC wants and it won’t get you funded. There are other routes to that.
What VCs want is if 99 of those startups fail, to be holding the Airbnb, uber, Anthropic at the end. Because holding that from the beginning will make you more money than any other option.
The stock market is mostly based on the greater fool theory. You can’t really escape that.
Most VCs doing 99 investments for the 1 big are akin to YC. They’re not doing series C for $100m and expecting 99 of those to fail. They’re expecting to get a return somewhat shortly back.
Holding the stock isn’t helpful for a VC unless they’re going to be using some financial mechanism for leverage - which means they’ve given it up for the other institution who now essentially owns it. A lot of these stocks aren’t giving you meaningful dividends. You have to sell or give up some form of control on them to be a successful VC. How else would you continue to invest?
> There’s a desire for other investors to be a sucker that holds the bag at the end.
I agree with everything you said except for these two sentences. If you take VC funding to build a sustainable business frankly you’re doomed from the get go. That’s not what a VC wants and it won’t get you funded. There are other routes to that.
What VCs want is if 99 of those startups fail, to be holding the Airbnb, uber, Anthropic at the end. Because holding that from the beginning will make you more money than any other option.