This article gets a lot wrong. For one, it calls Rupert Murdoch and Betsy DeVos VC and I think that's a real stretch of the term VC. Everyone likes to point out Theranos as an example of Silicon Valley Hubris when in reality no respected SV institutions put money into it.
I think you're flirting with a no-true-scotsman argument. VC can mean everything from "seed fund" to "private equity" to "family funds". Giant investments at later stages are frequently from institutions that don't do early stage investments.
And Tim Draper, at least, invested in Theranos. Theranos isn't as much an indictment of Silicon Valley as news articles say, but it's still a bad look.
Years ago I worked at a small, like 5-7 person startup in soma where we were surprised to find Rupert himself personally come by, later send some chiefs to do due diligence, and cut us a check. We worked with a few of his brands after that.
It didn't feel different than any other VC experience I've seen as an employee, whether that was A16z, Sequoia, etc. If it looks like a duck...
The article is primarily about WeWork and the VCs that invested in it. I don't get why so many comments in this thread are about the Murdoch/Theranos stuff which hardly features. WeWork had "real" VC backing and 95% of the text is the story of WeWork. If anything the weak point of the article is it perhaps focuses on WeWork too much and generalises from that to the whole VC industry, which may or may not be valid, I don't know. But judging by the conspicuous lack of discussion of the meat of the essay visible in this HN thread, I'm guessing either most people didn't read the article or there is enough truth to it that arguing minor semantic points is the best we can do.
You arbitrarily restrict the definition of VC to only institutions in Silicon Valley and then further gatekeep with the word "respected" institutions, which are presumably those that a-priori meet your preferred definition by not investing in Theranos? No True Scotsman indeed.
Everyone's pointing out Theranos, but if you remove it, the article isn't any weaker. Any important incorrectness that actually counters the article's point?
> A venture capitalist (VC) is an investor who provides capital to firms that exhibit high growth potential in exchange for an equity stake.
I have a friend who invested $10k into another friend's startup. Is he a VC now? If you want a term that refers to all investors we already have one - it's "startup investors".
VCs are mercenaries - they invest someone else's money and they are responsible to return the money in 10 years or bust. They take board seats, they try to drive when things get tough, they try to push companies to the breaking point because 10 years are fast approaching.
This sets them apart from FFFs or Angels, for example. Or even from Investment Bankers.
You've redefined VC here, but not for any useful reason. Putting money into a risky company is "venture capital". It's literally capital for a new venture.
The distinction you're making is between institutional and individual investors. It's worth talking about the difference between institutional and individual investors, but it's all venture capital.
