🤖 A decade of zero rates under-trained a generation of operators

“they lived and grew up in a day and age where they were told growth at all costs. And it's super hard culturally to go from that type of execution to the principal type execution you guys have been promoting over the past several months. It's just hard. It's not impossible, but it's very, very hard.”

“Well, I think that it was a symptom of just the fact that there was a lot of free money in the system.”

“And now what happens to those actor or VCs who really are faced with portfolios that are upside down and they really have no idea how to weather a storm.”

“there is a generation of venture capitalists who were added during the boom, who were operators, but they've never been taught to have the discipline of capital allocators.”

“there aren't enough checks and balances, and there are fundamentally people who are deeply inexperienced, who are in the wrong job.”

“There's a massive pressure on young, junior partners, principals within these firms to do something.”

“Again, we've said before, most venture investors are probably unprepared for this shock because they've never lived through one.”

“And unfortunately, most folks who are working in the investor community that are sitting on boards weren't around for the dot-com crash the last time this happened.”

“This is the beginning of the beginning. All of these people who have zero judgment are going to fuck so many companies up.”

“Management has told you in a way, Chamath and Sacks, management has told you they're incapable of running this business, this concern in a thoughtful way.”

“But if it's that we just have such institutional rot, we're incapable of doing it, well, then you might as well just not write the check because that company is going to get undercut by some new white sheet version of that business that doesn't have any of these impediments.”

“And I think that venture has always romantically been described as like buying lottery tickets. And so it doesn't matter if you lose. But when you have that kind of attitude, you just become super complacent and you don't think about left tail risk.”

“I'm seeing Series A and Series B companies that literally don't understand their own accounting. And so when we start talking to their accountants, there is a huge gap between what the accountants think of this business and what the founders think of these businesses.”

“Because we went through a phase where if you were a VP of product or a VP of design or a VP of engineering at a well-known startup, that was the most obvious onboarding into a venture firm. But if you just look back at the data, that cohort of people has actually never made money.”

“the venture business of the last 15 years, everyone since 2008, everyone's been trained, and all the younger people that have come up and are now partners and running the firms on an environment of momentum investing, rather than fundamental investing. And so there is also a question of how fit the investors are for a market space where valuations are flat or descending”

“they don't have the skill set to execute at a high level at any point in the cycle, except when rates were zero, like many business models. And now that rates are not at zero, these people are turning out to be extremely underdeveloped and unable to run these businesses. And when he said that, it really struck a chord because he's right.”