"The Most contrarian thinker in VC" & Father of Modern Venture Capital. VC, Angel, LP. prev: @Google @Oracle @ucberkeley @Columbialaw
New York, NY
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U.S. Venture capital hasn't been able to outperform European VC for the past 20 years. The Thiel Andreessen generation of VC took one of the greatest engines of economic growth and American ingenuity, and turned it into an old world rent extraction scheme.
wired.com/story/to-save-the-…
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"I had a working product, and customers ...everyone said no. Meanwhile...other people who fit a different "profile" get money thrown at them for shitty ideas. Those VCs were ignorant and shortsighted. The only thing I could attribute it to was..I was black." Calendly $60 Mill rev
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51% of venture capitalists have MBA's and nearly 75% have an advanced degree. Research from the past 13 years reveals strongly statistically negative performance for fund managers with MBAs & having an MBA from a prestigious university does not eliminate the negative correlation.
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While 65% of VC funds have no female investors, and only 12% have women in decision making roles, 69% of venture firms that scored a top-quartile fund between 2009 and 2018 had women in decision-making roles.
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Story behind this: An employer fired all of its black women employees, & when the black women tried to sue, the employer said:
We still have black employees (all men) &
We have women employees (all white)
so we didn't discriminate on race or sex
And the court said "you right"
Intersectionality is an analytical tool particularly used in a legal context. It sprung out of the inability for a Race-based or “sex”-based discrimination claim to capture the discrimination Black women face.
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When I see powerful executives and investors spew such disgusting, sexist rhetoric I can't help but think about the cultures they set at their workplaces and the downstream effects of their investments on the ability of women to advance their careers and make a living in peace.
I’m sorry but the richest man on the planet casually telling a woman he’s not dating that he’s going to put a baby in her is so skin crawlingly creepy I don’t know where to start
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Thread:
Despite the Silicon Valley's narrative of meritocracy, success in our industry often isn’t a matter of merit at all, it’s a matter of network.
It's time VCs end our exclusionary, value destroying practices.
It's time we BAN WARM INTRODUCTIONS!👏🏾
medium.com/@DelJohnsonVC/ban…
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Underrepresented and underestimated people: venture capital represents one of the most lucrative opportunities for wealth creation in all of traditional finance. Do NOT allow people to discourage you or steer you away from the field if you intend to wield its power for good.
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Me personally, I don't think we should be handing over political and economic power to a group of people who couldn't outperform a bunch of French bureaucrats when given a 50 year head-start. I understand they are out of ideas but that sounds like a signal to change the players.
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I have a very simple proposal: Before we start talking about rebalancing the international order or reinstalling King George III on the bl0ckchain or whatever, how about we check and see if the people proposing these changes are actually competent or good at their jobs?
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The claim that there is a "pay it forward" culture in venture capital or the silicon valley is absurd on its face. Completely out of touch with with the lived reality of most people
Silicon Valley VC is mostly a patronage scheme for the well-connected. Your anecdotes are useless
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I haven't seen a group of supposed superstars blow a lead this large since 2004 USA men's basketball. It seems as if all we hear about from VCs these days is "stagnation" and inability to "build. Maybe because the team we assembled to invest in the future is full of bad players?
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Pitch deck thread:
You know what? I'm going on staycation tomorrow and feeling good. Let's break down pitch deck construction with Data.
(info from the Docsend report)
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91% of venture capital partners who sit on at least one company board are male and 75% of partners with at least one board seat attended an Ivy League school, or one of Caltech, MIT and Stanford.
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Super interesting that this is trending, but I'm not seeing much engagement from the VC class. Hmmm. Would anyone like to make a statement?
Peter Thiel, the billionaire Trump donor and Facebook investor, has been enthusiastically palling around with Nazis. Blockbuster story from @RosieGray and @RMac18 buzzfeednews.com/article/ros…
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Outperformance by minorities,(especially Black people), in a majority controlled field is often met with rule changes and goalpost shifting designed to reassert the original hierarchy.
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Lmao how many panels do I have walk out from before folks realize I’m serious about the no all-male panels thing? The counter is at 2.
This will be a running thread...
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Should a founder have a Twitter account?
A 2017 study out of Wharton found, "startup firms active on social media have higher chances of getting funded, receive larger amounts of funding, and have a larger number of investors."
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Hey, of course I accept your apology. We all make mistakes, but it’s important to treat critical issues like BLM with care.
I don’t expect you to be perfect, and I don’t claim to be perfect either. We are all learning together. It’s important to actively seek out feedback.
We have taken down the video with Del’s tweets from our official account and we apologize for the harm it caused. We also removed any references to team members on the site to center all of the attention on advancing the initiatives of the Black orgs we are supporting.
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Please stop worrying about pissing off rich people. They are not bringing you to space with them. I promise.
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Venture capitalists are calling risk management "the enemy" just over half a year after the industry was screaming for the government to rescue their failing bank.
Ladies and gentlemen, I present to you, moral hazard.
Marc Andreessen, who runs one of the biggest Silicon Valley venture capital firms, wrote a "manifesto" today labeling “social responsibility" and "tech ethics" teams "the enemy."
His firm recently pivoted from crypto/Web3 to American military and defense contractor technology.
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Silicon Valley just recycles tired ideologies, Benthamite Utilitarianism, 1920s' Eugenics, Multi-polar World theory. They can't come up with anything new, and have no theorists. And we wonder why millions of people are crossing their fingers that a single website doesn't go down.
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Venture capital diversity initiatives have completely failed women & minority founders, as well as the non-elite & those from disfavored regions
Too often, VC reformers push for "community rooted" solutions that inflame the problem rather than solve it theinformation.com/articles/…
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Wow, it finally happened! I’m empowered to write checks up to $50,000 thanks to @indievc, @KauffmanFDN and my own hard work. Brick by brick we build. Join me on one of the greatest venture journeys ever taken.
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We’re still at the part of the plan where the wealthy elites all of a sudden start start confessing they are conservative/ republicans? boring
Can we skip to the part where they start making the explicitly anti-democratic arguments? I’ve already read this part of the playbook.
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If Silicon Valley is so non-conformist, how come so many of its leaders are uniformly racist?
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The idea that tech authoritarians are motivated by ideology and not profit is the hardest true idea for outsiders to accept.
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Private equity is a massive wealth transfer from the lower and middle class to the rich, from POC to majority white investors, and from groups that skew female, to men. This despite the fact that venture capital investors have underperformed for decades. +1
This is a painful truth.
Investors are funded by teachers pension funds (and others) who’s money comes from women & minorities. Literally 70%+ of the funds in a teacher pension fund originated from women & minorities, and then investors deny capital to women & minorities. Sick.
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Is everybody ready to get serious now? I told everyone what was going to happen aligning with the VC power structure and pushing little rinky dink initiatives that do nothing substantive, and only serve to make individuals feel helpful.
~$150B VC funding went to U.S. startups in 2020.
Only 0.67% of that went to Black-founded startups.
news.crunchbase.com/news/hig… via @crunchbasenews
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“VCs have trouble predicting success and have low return.”
The papers are going to keep coming out refuting VC dogma because as I’ve been saying, nearly *everything* we think we know about VC is wrong.
The older you are, the more likely you are to succeed as a startup founder.
True all the way up to age 60 (!).
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If this reporting is accurate, we really should start asking why venture capital limited partners, the individuals and organizations who invest money in VC funds, organizations like college endowments, pension funds, and insurance companies, are funding anti-democracy movements.
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Honestly I just want the folks who told me that speaking out about racism and other problems in our industry was rocking the boat or being too aggressive. I want them to sit with themselves and realize they would have been perfectly fine with letting things continue as they were.
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This close to advising Black founders to rebrand as “dark mode founders” to finally get some VC attention. Smh
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All that dense theory reading, all those AI generated images, only to get KOed by Mario giving the finger, smh.
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VCs', whose entire business model relies on power law logic -- that 99 companies fail but the 1 out of 100 that makes it makes up for the failures, wants us to bail them out because 30% of their companies are exposed to systemic risk? That math is not mathemetizing.
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Hi @KauffmanFellows and @jeffharbach, it's me again. Remember when I asked you what your program was doing to train the next generations of minority VCs? Or if you understood how hard it was for some of us to attend your 70k+ program without sponsorship? And you didn't follow up?
We Stand With The Black Community. The following message was sent to the Kauffman Fellows community from Kauffman Fellows CEO, @JeffHarbach - mailchi.mp/kfp.org/we-stand-…
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All female founded companies received less funding than one struggling startup (Wework)& one company (Bird) received more in its last round than all companies funded by black women combined. Why? B/c a small group of wealthy male investors have monopolized innovation capital.
This just came out. + I’ve been saying for months that the escooter co Bird got more funding in their last round than all Black women who received venture funding in 2019.
It’s just so insulting. And I get to have that opinion and say that without being dragged, right? K. Cool.
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Now we're getting into the weird stuff. Yes, it's true!
These VCs practically worship a guy who wants to put what he considers "undesirables" in virtual reality prisons, and turn places like San Francisco into it's own micro nation protected by private nuclear weapons.
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Silicon Valley VCs are washed-up and out of ideas, and they’ve taken to esoteric anti-democratic political ideologies to mask the fact they are washed-up and out of ideas.
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As I said, these tech folks run on patronage networks that have sapped nearly all genius and dynamism from the industry.
Silicon Valley has become a political patronage project, which is why the frontier tech is less and less able to compete.
I was skeptical but quite hopeful for Doge, but their incompetence in finding fraud, indiscriminate cuts to useful programs, inability to run a website, revealing secret information, and failure to even understand the systems they're critiquing, is an enormous blackpill.
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“Not having black founders in your portfolio is a failure that can’t be donated away.” - @MoniqueWoodard
With the high heat truth right now.
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The world is run by people who have trouble opening a google doc and y'all are worried about imposter syndrome?
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My 1st @wired: The SVB crisis reveals how VC recklessness exposes the economy to systemic risk. New research shows VCs have “little or no" investment skill. Society must fundamentally rethink the power we give VCs & reimagine how we invest in innovation! wired.com/story/to-save-the-…
How Venture Capital Can Avoid the Next Silicon Valley Bank Fiasco? It’s time to rethink venture capital’s power—and reimagine investment in innovation. wired.trib.al/ggpKkxY
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With all these LPs and Midas list investors reaching out to me, just imagine if some enterprising fund had incubated me 6 months ago like I suggested. They would be in a position to take a clear leadership position on this issue right now....oh well, better luck next time.
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VCs for the most part don’t hire black investors, don’t invest in black founders, don’t have black friends, don’t invite black people to their events. VC’s don’t give a damn about black people.
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My buddy, who is an immigrant VC is starting a program for immigrant and 1st gen founders to help build community and help with company builders. If you're a U.S. immigrant founder or 1st gen founder, DM me. Focus is on B2B and SaaS this cohort.
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Fear of being yourself blocks progress. If you broadcast who you are widely enough and with a pure heart, your people will find you.
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When normal people learn what weirdo idologies VCs have been incubating...Uh, all I will say is you all have a limited amount of time to get on the right side of the coming social moment.
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.@ArlanWasHere and I share a strong commitment to human dignity. I extended an olive branch which she graciously accepted. We discussed our positions, my intentions, & agreed a tweet about me may not have captured the full nuance of her opinion. We’ll continue to work things out.
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Whenever someone says something like this, we should remember the status quo was/is a world where women got fired for wearing pants and speaking up about harassment & black ppl got/get fired for saying their lives matter or for hair texture how it naturally comes out of the head
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5 years ago on this day, @MrBeastYT recorded a video and set it to go public today.
At the time he had 8k subscribers, but in the video he sets a goal to his future self to have 1million subscribers.
He now has over 44million subs.
Really illustrates the power of goal setting.
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Remember when VCs were on here telling folks NOT to take their money out of a collapsing bank because they were "great partners?" These are the type of morons we have running the innovation economy.
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Super interesting how so many VCs' are always railing against "cancel culture," but VC is perhaps one of the better known industries for backchanneling and "blacklisting"👀
Seems like folks need to clean their own houses first. Lot of projection going on.
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Doing the right thing rarely produces immediate benefits. You have to be willing to walk in the wilderness for a while to reap maximum gains.
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We have an investing and startup community that is just dudes gassing up other dudes, and it's garbage.
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The evidence for women fund manager outperformance is so overwhelming that I honestly can't respect any male manager/LP who couldn't find/exploit it during the 50+ year history of our industry.
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It's quite simple. VCs started hiring and funding the next gen of investors based on who was allied with their politics and not based on who is actually good. And those unskilled investors can't allocate their way out of a paper bag.
Now VC-backed products are quasi vaporware.
NEW VIDEO - Rabbit R1: Barely Reviewable
piped.video/ddTV12hErTc
This is the pinnacle of a trend that's been annoying for years: Delivering barely finished products to win a "race" and then continuing to build them after charging full price. Games, phones, cars, now AI in a box
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Startup due diligence is literally fake, I tried to tell you smh.
JP Morgan is suing the young founder of Frank, a buzzy fintech startup it acquired for $175M.
Frank allegedly lied about its scale and success by creating an enormous list of 4 million fake users to entice JP to buy it.
from me and @_IainMartin: forbes.com/sites/alexandrale…
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Large, established VC megafirms are hoarding the liquidity and barring entry to newcomers, and the large funds don’t have the ability or interest in dispensing the capital to upstarts who may threaten the VC’s interest in established businesses. Read this: laconiacapitalgroup.com/blog…
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And if you're thinking, "wow, that's a slick-ass technicality, but there still seems to be something wrong with an employer being able to do that." Well then you're on the same wavelength Kim Crenshaw was on when she wrote her first paper on intersectionality in '89.
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I don't know if there's a more parasitic job in all of finance than legacy venture capital mega fund manager. Absentee capital owners give these guys billions to skim 30% off startup returns in exchange for tweeting about Nietzsche.
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Lots of successful people grew up hardscrabble, fighting for every bit of success they got. But the hard thing is to understand that once you've made it, you ARE the power structure, and can no longer hide behind your narrative.
People in power must be held accountable.
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Very embarrassing for the VCs connected to this guy. Seems like they'll give money to any pseudo intellectual who flatters them and says they should rule.
Such a profile certainly won't make the limited partners who invest in the VC funds look competent.
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Public service announcement:
Investors who say they want to help underrepresented founders, but don’t want to disrupt the structures that lead to these founders being exploited/under resourced, actually don’t want to help those founders
They want to profit from the exploitation
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Gonna have to break up the Silicon Valley "little tech" cartel or the next decade is going to be the US getting dunked on technologically over and over again with little effort.
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Farmers may not have engaged in the sort of reckless, enmeshed, sweetheart deals that incestuous silicon valley investors founders and bankers engaged in.
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Venture capital advancement is based on friendship/ network centrality, not performance
The problem with network based advancement in VC is it fills the entire space with incompetence, which eventually leads to a shrinking market and fewer good companies being funded.
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Venture capital is a wealth transfer of public funds to foaming at the mouth racists. We need to start asking why, we allow such a transfer especially given the underperformance of the asset.
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It probably would have been good for my career to accept tonight's invite to the secret Clubhouse talkshow featuring big fund GPs and NYT columnists, but the problem with our industry is opacity and lack of equal access. I can’t replicate and validate those structures .
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No wonder why venture capitalists overemphasize academic pedigree in their funding decisions. They are rank elitists.
The goal for the Silicon Valley VCs is not to find objectively the most deserving or profitable founder. The goal is to reproduce hiearchy and create elites.
Peter Thiel believes only the elite should be in charge (President)
"Kamala...Howard is not Harvard...by the time you get to @Tim_Walz it's way worse. The credentials are even dumber than Kamala's. There are no smart people left."
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Is AI > VC?
This month, a Gartner report predicted machine learning would augment 75% of venture by 2025.
They're using research out of Harvard and MIT showing algorithms trained on publicly available data can outperform early stage investors up to 184% in real world settings!
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Wow, really appreciate the boldness of just saying this. We have an innovation economy organized around who a bunch of elitist dweebs think is cool and who isn't.
This is lunchtable politics driving what gets built and who gets rich.
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Researchers from MIT found that the mere existence of diverse individuals improved decisionmaking and served as a guard to individuals yielding to a wrong answer. However, non-diverse managers misperceived the increased objectivity as creating “unbearable” levels of conflict.
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With investment in women founders dropping more than 30% last quarter year over year, it’s time for VCs to admit they don’t really have a theory of change that doesn’t involve spamming the industry with diverse VCs, and that philosophy simply does not work for structural reasons.
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Just got a bunch of new followers...
If you're here to diversify your feed, please unfollow me. I'm not here to Bagger Vance for you.
If you're interested in learning more about venture capital and intersectionality, welcome! Read my article and subscribe to my newsletter.
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Pitch Deck Construction for Pre-seed and Seed Stage Fundraising
Folks, it’s been way too long. Once again, I’m here to break down pitch deck construction with all new data.
(info from @Docsend and Crunchbase)
THREAD:
Pitch deck thread:
You know what? I'm going on staycation tomorrow and feeling good. Let's break down pitch deck construction with Data.
(info from the Docsend report)
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The art of pitching VCs' comes down to one of two things:
1. Do they personally like you.
2. Can you help them commit fraud/quasi-legal grifts.
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Venture capitalists worried about getting canceled. The industry has essentially canceled black people from partnership roles since it started. Worry about that.
“Can’t eat gold metals” Jesse Owens
He could barely feed himself post olympics..It’s sad that even with all I’ve accomplished with @HarlemCapital, that if I stopped doing this, I truly don’t know if I could get a job in venture...we had to build this bc the system was broken
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It’s really a failure of the entire venture capital community, given that the community mostly shuns empirical investment methodologies and embraces mysticism and vibes based capital allocation strategies.
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Funds are imploding left and right and people are trying to convince you that your pitch deck is the problem.
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The fuck you mean "mentorship?"
The only thing most incumbent VCs have to teach me is how NOT to invest in Black people and women.
I don't want to learn that.
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That’s wild that all the Silicon Valley CEOs share a group chat and on a completely unrelated note announce layoffs within days of each other every time. Strange coincidence.
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When I said these Silicon Valley tech ghouls literally hate you... you're starting to see what I meant.
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All else being equal, the research says a founder should choose:
A newer VC over an established VC
A generalist VC over a verticalized VC
A VC fund with a diverse team over a homogenous one
Operationally hands-off over large platform based
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PSA: There's a difference between personal feelings and professional responsibility. "Bad vibes" have been used to lock many underrepresented people from opportunity, esp. Black ppl
Gaining power and using "vibes" as reasoning to deprive others is wielding a tool of oppression
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New numbers are out! Female founder funding at a 5 year LOW. This is despite there being more female fund managers than at any previous point in time. What gives???
What gives is that the idea that more managers from group X will lead to more funding from group X is bankrupt.
No surprise here. Women are 59% of any given graduating class. No one knows how many pre-funded startups have women at the helm (because why count women if it will make men look bad). The systemic discrimination is real.
@DelJohnsonVC #vc #startup
bloomberg.com/news/articles/…
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