The company is Stablegains, Inc. and the people to name are Kamil Ryszkowski and Emil Rasmessen, co-founders and, I think, Board members. Copy Ken Paxton, Office of the Attorney General, P. O. Box 12548, Austin, Texas as well as his challenger George P. Bush at P. O. Box 26677, also in Austin. (Stablegains and its founders are in Texas. They are spearheading the criminal complaint.)
Severely disappointing. I respect PG too much to believe he would knowingly condone this. The partner who did this didn't understand what they were investing in or should be decoupled with haste.
At the very least, the Alaska RMB, U of M Endowment, Bloomberg's family office and SMC should be asking why their capital is backing what should have been clear as day ex ante a fraud. Anyone living in Alaska, going to or an alumni of U of M or Stanford, or working for Bloomberg should be asking the same question.
Even if you think it's not fraudulent on the part of the founders, the industry is frothy and unproven and fraud-adjacent enough that investing in many companies in the space should appear to be a huge potential reputational risk beyond just losing some invested money. The people putting up the cash should be looking long and hard at this whole story.
And then once you get into the details, the moment you hear about one of the use cases for defi lending leading to these high interest rates being "put up crypto collateral to borrow to buy even more crypto since it's appreciating rapidly"... run!
This is their bread and butter.
VC doesn’t want to get out early #386. What drives their decisions is far more complex than your pithy summary.
Ah, yes, VC's decision making process is too great for us mere mortals to understand. Their motivation and calculus are beyond our ken. Woe to the uninformed laypeople who cannot fathom their singular desire for money and influence. The nuances of 'make more money' justify the great wealth which their discerning judgement deserves. As if a simple understanding of finance and deal making under advisement in most cases and a larger capacity for risk due to having excess wealth makes them any better than the rest of us humans.
I admit my second comment wasn’t much better, sorry.
VCs want to hold on to their successful investments as long as possible, with some limitations depending on the contracts for when LPs expect their money back. VCs obviously do not sellout their successful investment(s) as early as they could, usually they are buying into it and doubling down instead.
In some situations a VC might push to sell early: https://www.investopedia.com/terms/d/drive-bydeal.asp In others, they won’t, as is mentioned in that article. Perhaps if there is a good IRR they might wish to delay marking to market for as long as possible, so they can tell a story on their existing funds based on numbers that are not realistic? It really depends on the particular fund, the VC, the current market, and the specifics of each investment.
Disclaimer: I am an engineer.
I was not the original commenter with whom you were speaking. I'll admit that my comment could be rude, and for that I'm sorry. The length of the mockery was a bit much, but I don't think it was uncalled for. To assume that venture capital exists without the primary motivation and purpose of making money is misleading at best and delusional more generally. Tangential motivations such as investing for impact or being motivated by other considerations don't change the underlying goal and assumption of the act of venture capital.
> I admit my second comment wasn’t much better, sorry.
Placing venture capitalists within some special class whose reasoning or motivations are beyond the understanding of most people is where I take umbrage. Yes, there are considerations such as the underlying technology, exit strategy and timing, rounds of investing, and risk assumption. The vast majority of the time venture capital is performed under advisement of attorneys, accountants, and consiltants. Venture capitalists perform no special function beyond writing the check, transferring the money, and rarely coaching or dealmaking with founders. However the chief expectation is outsized returns for above average risk in a least a few of the ventures to make up for all of the startups that failed. If the aim was social good, there are very many worthy causes and charities that need that capital. 'Stablegains' is not and was not a charity working for the collective good of society and neither are an alarming number of startups and YC-backed startups these days.