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Comment by rendall | Hacker News Reader

In NYC, I fell in with a crowd who had quite a few extremely successful niche entrepreneurs. A kombucha maker, a boutique paper maker, some kind of avant-garde film editor, fine-art photographers, a fabric designer, this kind of thing. They were all so sought-after that they could spend only a few hours a week on their craft. Beautiful homes, expensive clothes, vacations. It took me some time to figure out that they were not successful entrepreneurs, but that these were fronts to cover for rich parents.

Personally, I don't care if someone has rich parents. Covering for it in this way felt a bit like unearned prestige, though.

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I am pretty sure this has been a thing for as long as there have been rich people. In fact historically it’s been common for there to be plenty of noble titles and ministries that have no responsibilities at all, but have a title, pay, and “prestige” - which could be staffed by heirs and unlanded sons to help them build their “career” or give them some perfunctory thing to do.

Now that private enterprise is the hallmark of wealth/status instead of nobility, we have bullshit businesses. I’ve run into several of these people myself and it always takes me a while to figure out where the money’s coming from until it clicks. I’ve also seen these be quite common for wives (don’t mean to be sexist here, but I don’t know if examples for husbands) of rich men to do, either through straight up grift a la Newmann’s wife or something very very lifestyley like interior design or crafting.

What’s worse is that a lot of these fake entrepreneurs are in tech now too. Some of them are even “serial entrepreneurs”. I’m sure VC people run into them a lot, and I’m also sure a lot of them are actually talented and know what they’re doing, but to me too much involvement of the Bank of Mom and Dad makes a person/company lose a lot of legitimacy.

Bezos got $250K from the Bank of Mom and Dad to start Amazon. Not legitimate?

He only got it initially, that’s not what the parent comment was talking about. Future investments into the company came purely through the company’s success and growth (and VCs attracted to that). Just the initial investment would hardly count as “too much involvement from mom and dad bank”. Especially when that investment managed to grow to $1T+ without any involvement from them since then.

That kind of sum is still within reach of middle class parents

No??? How is a middle class income of 50k/yr gonna raise 250k for a child separate from childcare, college, etc?

50k is not middle class

https://eu.usatoday.com/story/money/2021/10/05/what-middle-c...

"Some experts say you are American middle class if you made between $51,200 to $153,000 in 2020."

what was the middle class income in the year that Bezos got the money?

I guess it seems reasonable to say though that actual median middle class is around 100,000 so the parent poster's question remains, where are they going to get the money. Well probably take a loan on the house for their son's crazy new-fangled internet scheme I guess, that seems unlikely.

If it is reasonable to survive on $51,200 then a family on $100k could reasonably be saving the balance $48,800 a year. Say half of that goes to tax because I'm too lazy to look up the tax rate, it'd take 10 years of savings to save up $250k.

So practically speaking, a small syndicate of middle class families (4-5) could reasonably found Amazon. Probably not one alone. Although I echo corndoge in that anyone describing 50-150k as the middle class income range is being polite rather than realistic about what what the class is.

>If it is reasonable to survive on $51,200 then a family on $100k could reasonably be saving the balance $48,800 a year.

yep, it sure would be possible in theory. Although in practice I don't think that's how it is for most people.

Also in a range of 50 - 150k obviously you have to assume that 50k is in the poorest parts of the country, and of course there is nothing saying that only nuclear families or larger can be middle class so I guess, a young single guy could be middle class.

so let's say

https://www.businessinsider.com/personal-finance/how-much-to...

California $111,206 $80,440

Tennessee $50,629 $56,071

In the case of Tennessee you might be earning enough at 50k a year to be ok, but it seems unlikely that in your region and class you will be getting the chance to invest in Amazon.

on edit: the money per year, first number middle class income in region, second number median income in region

before someone else comes in on it I'll note that families often say "we made x amount last year" while individuals say "I made x amount last year", it is up to whoever is putting the numbers together to determine how they want to deal with it.

At any rate a family I am going to suggest a family of three with 120,000 a year is probably around the same as young single guy with 50,000 a year. Which is just barely middle class.

I don't think the barely middle class is investing in anything (except for the ones with superhuman discipline, which I know some), and the ones who are actually in the middle of the middle class probably aren't going to have enough to fund early Amazon either, my disagreement was basically with the opinion that the middle class was much higher than 50k.

I remember reading an article that stated if you lived in Palo Alto (as opposed to East Palo Alto), and make $175K, you are considered “poor.”

It was a bit over the top, but uncomfortably close to the truth.

You've also got to consider that this is putting _a lot_ of eggs in one basket.

Would 4-5 families really pool all their savings for 10 years to invest in one childs potential business?

Maybe. I think what is more likely is that 250k would represent a portion of the money a family could save and then put at risk. I would say this adds another order of magnitude on the earnings needed to be able to do this.

So I don't think it's worth quibbling over whether 50k or 100k is middle class. To do this I honestly think your parental income needs to be $1M+ a year.

50k is nearly the definition of middle class in the US. Check out "median household income".

In France if a household has >50k€ of yearly income it puts them in the top 10% bracket so it's pretty rich

No. Median family wealth in the US is about 115000 USD, so less than half that.

It's within an order of magnitude. There were parents with 1000x as much wealth as Bezos's parents, did not produce Bezos.

If they have 1000x as much wealth they won't be feeling any need to.

Wealth is not income. Income is usually much lower.

What's the median family wealth of families with adult children?

Keep in mind that was $250k in the late early 90s, which is more like $1-2M today - so I wouldn't really say it is within reach unless the parents are literally betting the farm on the business.

However, IIRC his parents came on as investors in the same round at the same term as other non-family investors. So really it may have been more like Bezos giving his parents access to the deal of the century rather than his parents giving a leg up to Jeff.

> Keep in mind that was $250k in the late early 90s, which is more like $1-2M today

This did not pass the sniff test for me, so I plugged $250k into usinflationcalculator.com, with a year of 1993. It came up with $486k. I think your estimates are off by a factor of 2 to 4.

They might be estimating how tech costs (salaries) have increased rather than general inflation.

According to https://www.usinflationcalculator.com/ $250k in 1995 is $460k now.

I think the sort of person that just has that amount of available cash stretches most definitions of "Middle Class".

Bezos was like a VP at DE Shaw, that investment wasn't make or break, it does offload some risk. Someone else stated his parents invested in a later round with professional investors. It's odd how people focus on a parents investment, ignoring he was already probably in the top 1-2% in terms of income and so was his wife.

There’s absolutely a male equivalent. Almost every male “real estate professional” I know makes money mainly through nepotism.

They do tend to have the same thing in common: flashy IG posts and the constant refrain of “work hard, play hard”.

>Personally, I don't care if someone has rich parents. Covering for it in this way felt a bit like unearned prestige, though.

I know people who are Gilmore Girls-style "old money" rich, and it's as much the fault of the parents as anybody else.

These kids, despite having IQ, diligence and other success-correlated traits being normally distributed just like everyone else, are under unbelievably immense pressure to be ridiculously "successful".

When the private tutoring and strings pulled aren't enough to get them over the line, these kids need _something_ to save face and be a success for their parents. For some, it's some bullshit managerial position. For those that can't even manage this, it's "entrepreneurship".

For these rich kids to do a job that they'd actually be well-suited for (say, retail worker or truck driver) would be social suicide for the parents and destroy the relationship they have with their family.

IME (in the UK) they either go into banking and finance-adjacent industries - often law - or (as noted earlier) they do something "creative" that requires a bit of cultural marketing and generates some output of no particular interest.

The corporate types are all quite cookie-cutter post-aspirational. They run marathons or do some other intensive sports, (mostly) the women play a musical instrument to a near-professional standard, they seem to have an intuitive grasp of how stocks, property, and investment markets work, they're terribly positive and friendly and charming.

The cultural types can be quite good in a limited niche, and they're often collected as trophy spouses by the other types.

The other types you'll meet are military officers - usually male - who are similar to the corporate types but more sporty without much of a cultural side (some of them enjoy consuming.)

And Notable Media Professionals who are a subset of the creative type. They somehow land astoundingly well-paid media jobs as high-profile journalists or writers, despite no evidence of deep insight or investigative ability. And a relatively light workload. (Maybe one article a week, and a few festival appearances a year.) At the very top of the tree they fall into media management at the highest levels - running newspapers and media channels.

All of these jobs are very, very difficult to get into for anyone from a genuinely working class background. They're also marked by very rigid conformity. These people all know how to play the game, and they're incredibly sensitive to insider/outsider status markers.

The idea that someone merely middle class with some working class family history could use the latter as a diversity lever to vault into them is simply nonsense.

consuming what?

Cultural output

> It took me some time to figure out that they were not successful entrepreneurs, but that these were fronts to cover for rich parents.

"Housewife jobs" are structurally similar.

I'm based in Europe and work U.S. hours, so I usually have my mornings and early afternoons for leisure activities, including riding my horse. This means I travel a fair bit in social circles comprised mostly of middle-aged women who don't have regular jobs.

If you ask those women their job or, with a slight lack of tact, even ask directly how they make a living, it's usually something like yoga teacher, photographer, landscape designer, etc.

Initially, I always walked away from these interactions thinking something like: Wow, you must be a really good landscape designer, if you can actually make a living at it, and have the time and money for two horses at a pricey stable.

Later, I realized that these occupations are mostly fronts they put up because it's not socially acceptable these days for a woman to have a husband who does most of the earning for the shared household.

What you do is: You take some online class on landscaping and tell your girlfriend (the one who you're regularly giving $100-christmas-gifts to) that you're now a trained landscape designer. You do a bit of consulting for her by making a few suggestions about what flowers would look good on her front yard and have her pay $30 for the privilege of having consulted a trained landscape designer. From now on, whenever someone asks you your job, you no longer need to say "housewife", but you can say "landscape designer". If someone walks away with the misconception that you actually make enough money from your landscape designing to pay for your lifestyle, then that's just a misconception that you're under no moral obligation to straighten out.

The problem: This sort of behaviour is not really advancing the cause of feminism at all.

Because now, when a man tells me he's a landscape designer, I assume he makes enough money as a landscape designer to pay for his lifestyle. When a woman tells me she's a landscape designer, I assume it's a front and she really just has a rich husband who pays for everything.

Yeah, this is a plague. At face value, it's not a big deal. Who cares if housewives lie/fib?

In the larger sense, it's absolutely toxic, because it projects a wholly unrealistic vision. People see others "succeeding", and blame themselves for "failing" when in reality, the "failures" don't realize that the "successes" were bankrolled by parents/spouses.

It is of course possible to succeed without the benefit of being bankrolled, but our weirdo faux-entrepreneur class makes it really challenging for others to understand what it takes or their odds of success.

...yeah, misrepresentation of the odds of success is actually an interesting part of the whole dynamic: I think many women sort of fall into this without intending it. Their peers suddenly all seem to be super-successful yoga solopreneurs, so they might get into it fully intending to use that as a career to financially support themselves and their families. When they later fail and discover the truth about their peers, they don't want to admit defeat and themselves fall into the pattern of bs'ing people about their success, thus becoming part of the problem.

> In the larger sense, it's absolutely toxic, because it projects a wholly unrealistic vision. People see others "succeeding", and blame themselves for "failing" when in reality, the "failures" don't realize that the "successes" were bankrolled by parents/spouses.

I'm glad someone else gets this. I would have a real-talk conversation with some of those friends about this, but it was really hard to get it across.

"People really look up to you, and aspire to do what you do."

"Oh that's awesome!"

"No, not awesome. They won't be able to. They don't have the advantages you do."

"Are you mad that I have money?"

"No, you're great. It's just that people won't have a realistic idea of what it takes to get where you are, if they think all you do is take photos for a living."

"Hmm. Is this important? I have to get ready for other thing."

They would assume it had something to do with jealousy, so I mostly stopped bothering.

>The problem: This sort of behaviour is not really advancing the cause of feminism at all.

Isn't the real problem that it is socially unacceptable to not have a job, even if you are a housewife, mother or even househusband. We have gone from women not having the choice to work to not having the choice to not work.

I thought that's what I was implying, although my choice of words was probably clumsy. I guess it's a sort of chicken-and-egg relationship. If it was more socially acceptable for women to be housewives, they would admit to it more freely. If women admitted to being housewives more freely, it would become more socially acceptable.

In what circles is it socially unacceptable to not have a job? I know of no systematic studies of who does this kind of thing and who does not and what the relative prevalence is, but of my entire extended family on both my side and my wife's side, other than my wife, I can't think of a single wife that has a job, and none of them pretend to have jobs, either.

If we're talking solely of the class of people who own horses kept in upscale stables and have the leisure time to ride them daily, then perhaps for them simply maintaining a household and raising children isn't enough and they feel idle if they don't pretend to have jobs because they can pay full time maids and nannies and maintaining a household and raising children really isn't time consuming and leaves them too much idle time. That is hardly a common position to be in, though.

There is a guy, Viktor Kozeny, who is known for some hard to understand scam, and, I think he's a guy just like that, who through some horrible mistake ended up having actual responsibility, and screwed up so completely that nobody is willing to believe it, and there is no hidden tax haven money, only his well of mother.

You could even use Patreon to create an online proof of your successful business. If you have a hobby, like writing blogs or making photos, just subscribe to your friends' accounts, and they will subscribe to yours. Patreon will take some 30% of the money, which is not a problem if you are rich, and now you are a successful artist and you can prove it to the whole world.

Is it really a cover? Or is it just what they do and make money off it by already being rich and having connections as well as being supplemented by their parents.

It depends on the person, plenty of children of rich people run actually successful businesses, but there are definitely “businesses” that are a kind of pomp around not actually doing anything.

I don’t think kids or parents necessarily see it as some kind of scheme, probably it’s more like the parents want their kids to be successful, but the kids don’t have any idea what to do and are super comfortable having their rent paid + a parent’s credit card + a salary paid for by their parent’s investments, so they don’t really try that hard because there are no consequences for failure. And the parents don’t care too much either because they’re proud their kid has a business and think it’ll be valuable experience even if it doesn’t do well.

One of my first jobs was for a man whose parents were quite wealthy. I found his business decisions to be incomprehensible until I understood that his business was basically something he could point at so his parents would give him more money. Something internal to their family, I guess. He would have been quite fine with doing nothing at all, but then his parents would have cut him off.

If they made this into a comedy series I'd probably watch it.

Have you seen Connor Roy in Succession? His “hobby business” is running for President.

Absolutely! Each episode could be a new bizarre business. A journey from idea, to creation, and to collapse. And of course each one starts with buying yet another new domain name.

This is literally Arrested Development.

I think the parents also see it as a good method to fill out the kids time as the parents are afraid that if the kids don't have anything to do, then the kids will end up doing drugs.

Kids doing drugs in rich families are very common as a way to handle the insane pressure. It's just that "Drugs Don't Work".

Some kids are really smart, others are just average joes with cash.

It’s hard for young people to just be rich.

Were all of them really covers? If I were rich, I would love to be able to pursue some craft without caring about profits. In fact that is exactly what every human should be able to do, instead of slaving away their living hours to some job.

I'm curious too but perhaps OP knew their businesses had little to 0 revenue yet acted like they made money which was actually from a trust fund.

Ahh yes, the trustafarian. The classic NYC archetype. Having been in similar crowds in NYC (especially Brooklyn), I don’t know if I would say that these are “fronts,” per se. It’s just that most trustafarian’s don’t openly out themselves as such because it’s impolite/uncouth to out oneself that way. In LA, people with rich parents flaunt it, but on the east coast, it’s better to keep those things to oneself.

That said, as you figured out, it doesn’t take long for people to identify who the trustafarian’s are in a group. I’m solidly upper middle-class myself but I grew up around a mix of old-money and new-money people, so it didn’t take long for me to figure out, once I got to New York, that any Smith grad working as a busker or doing burlesque while living roommate-free in a 1BR in the West Village or a 2BR in Prospect Height, had rich parents. Because only people with benefactors can do that. But I didn’t know too many trustafarian’s who would pretend to be self-made. They just didn’t advertise that it was daddy who was paying the Amex bill. But if you’re 25, working as a candle maker, and you have a Platinum card, well, we can all do the math and know what’s up. Also, if you went to an elite college and aren’t actively working in a high-paying industry, let alone in anything associated with your nebulously-defined liberal arts degree, well, again. Of course you have rich parents. Also, those are the people who are never complaining about student loans, unlike the gaggle of very vocal NYU, Columbia and New School grads who are trying to figure out how they can pay off $250,000 in loans while working at Vice. (The answer is most of them cannot and will wind up taking corporate jobs within 5 years.)

But NYC is even further different because there are so many levels of inherited wealth/rich parents. The person who has parents paying for their nice apartment and lifestyle, but is still pursuing a niche creative pursuit, is very different from the uber-rich young adult who has a job — even if it is in name-only — at the family-controlled business or who devotes their time to being on the board of a charity or museum. These are the people that have private planes and summer in the most exclusive parts of the Hamptons, have European vacation homes, where expensive (but understated) clothing and jewelry, attend frequent black tie galas, grew up in Greenwich and hang out almost exclusively with other people just like them, who come from families with hundreds of millions of dollars. Which are further different from the more west-coast like people that are children of parents who made their millions in tech or Hollywood and flaunt their wealth with zero pretense of where it came from, all over Instagram. Which is further different from the non-European foreign-born rich kids whose parents might have more money than everyone else, but don’t have the social class acceptance of that second group.

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