Sequoia has marked its investment in FTX down to $0 | Hacker News Reader

Sequoia has marked its investment in FTX down to $0

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137 pointsdwynings50 comments

I actually talked to Sam for a bit in the "early days" and he always seemed like an OK guy. Approachable and "honest" which makes this all the worse... I kept asking "why start an exchange when you're killing it with Alameda?" and his response seemed to consistently be about wanting to make a better product and legitimize crypto... ugh, don't even know what to think now... if that was all a front.

It's really odd to think because its always "some guy in the news" that gets bad press and demonized (not unjustly), never really someone you "know of." (prob a lot of ppl w/that experience hanging around HN tho, lol)

It's just weird feelings but mostly just "wtf man."

> ugh, don't even know what to think now... if that was all a front.

It's very easy to "get high on your own supply" and lose objectivity around what you're doing and how likely it is to succeed. This doesn't require malice either.

From April of this year:

https://www.bloomberg.com/news/articles/2022-04-25/sam-bankm...

I don't know how to reconcile this with the comments people are making. He didn't sound like he was under illusions about what he was doing. And surely other people read/listened to this.

It was pretty much laid out with a ton of foreshadowing.

Near the end:

"And it is sort of like real monetizable stuff in some senses. And you know, at some point if the world never decides that we are wrong about this in like a coordinated way, right? Like you're kind of the guy calling and saying, no, this thing's actually worthless, but in what sense are you right?"

"And if you're like, that's dumb, it has no cashflow flow. I'm gonna short sell it. You lose all your money."

Alameda messed up in the same way that three arrows did. That’s not necessarily Sam’s fault, because he did not run Alameda at the time. However, it seems like you build them out by providing them with a ton of FTT collateral so he’s pretty much complicit.

Most people (all?) are driven by circumstance rather than their "inner" self. He might be a good/honest guy that started this with good and honest intentions; but things went very differently. There is little he can do, and I think there are few people in the earth who can stand to circumstance. (especially when billions and millions of people are involved.)

It’s a regular failure mode in human interactions. Just because someone is attractive/charismatic/sincere doesn’t mean they should be taken seriously, and just because someone is ugly/inarticulate/creepy doesn’t mean they should be disbelieved. Extreme idiocy and true genius are just invisible to most people (before the fact), and the discerning folk get only Schadenfreude.

This piece will forever be on their site, however: [0].

[0] - https://www.sequoiacap.com/article/sam-bankman-fried-spotlig...

>I open with a doozy: “Am I,” I ask, “talking to the world’s first trillionaire?”

wow this is shameless lol

> Professor Bankman-Fried is my tutor. He’s as good at explaining the principles of macroeconomics as anyone out there in the world today—and I know this for a fact because I’ve subsequently watched YouTube’s best on the same subject. But SBF teaches me Macro while simultaneously playing round after round of Storybook Brawl.

This stuff is beyond parody. Dude's getting interviewed for a nauseatingly butt-kissing puff piece, and he can't tear himself away from a game targeted at literal children. (He bought the developers and proceeded to cram NFTs into it.)

Also, this

>I know this for a fact because I’ve subsequently watched YouTube’s best on the same subject

should never be said about any subject, unless it's being said ironically.

I mean, MIT, Harvard, LSE, Chicago and others have Econ course lectures on YT. You can watch lectures from lecturers that students at these institutions have trouble getting access to.

Don’t be so sure that you can’t learn from the absolute best on YT.

YouTube's best and the best that are on YouTube mean something different to me. The latter being MIT, Harvard, LSE and Chicago's best on YouTube and the former youtube.com/econonomydude.

A YT video does not give you assignments, reading lists or office hours to ask questions in.

I'd question the value of OCW-only autodidacts, in much the same way I would someone who claimed fitness training is unnecessary because he already knows about proper form having Arnold Schwarzenegger's VHS workout tapes.

That’s Peloton’s entire business model lmao

That’s an amazing article. It sounds like the he’s never heard of the kelly criterion, just makes massive bet after massive bet and then blows up. He does have ~1 billion more than me even after this mess, so maybe it all worked out.

Perhaps not -- reportedly he has $650MM in debt and just filed for bankruptcy today.

Fascinating. Dude needed to crack open a Taleb book.

Given his business moves I wouldn't be surprised is all his personal debt is also collateralized by FTT. As wise Walter Sobchak would say: "Mark it zero!"

>>> “Of the exchanges that we had met and looked at, some of them had regulatory issues, some of them were already public. And then there was Sam.” >>>

This will go down in history books...

I am sure it will get removed eventually. When things change, people change, systems change, the underlying cms changes articles are lost.

The prostrating quotes from the VCs in here are pretty unbelievable.

First, that they are even real. Second, that they actually decided to post them in a piece like this, and lacked the self awareness about how incompetent it makes them look.

Even if he turned out to be the real deal, maybe stick to the fundamentals of the investment. I'd be interested in learning what their DD process looked like

It won't because they already changed it.

It will forever be on archive.org though:

https://web.archive.org/web/20221110010120/https://www.sequo...

$0. That sounds about right.

Wow.. I think Mr. Bankman's wealth was $100 billion in Jan 2022 according to a Fortune estimate. I wonder what would have happened had CZ not made that tweet. Hmm...makes you wonder who profited from all of this. Imagine if binance bought puts on BTC before this announcement.

We probably don't have to imagine.

FTX and Alameda would have gone under regardless.

Binance probably shorted FTT and SOL.

I would’ve done the same if I wasn’t based in the USA.

I think they had plenty of FTT, probably just sold their instead.

> not made that tweet

Which tweet?

Given Sam Bankman-Fried's relation to effective altruism, it's also interesting to read how the EA community is responding to this. For example:

https://forum.effectivealtruism.org/posts/tdLRvYHpfYjimwhyL/...

https://forum.effectivealtruism.org/posts/yjGye7Q2jRG3jNfi2/...

Eh, taking venture capital and donating it all to random strangers is pretty altruistic in my book.

He took even more user funds and did the same.

So their cost basis was $150mm. What was the highest valuation FTX was marked at? I'm curious what the real change in value was for this fund.

$32B in September.

This makes me wonder, is Sequoia as good as they once were?

Or are they now completely different?

Am I the only who feels like these stories are the Boogie Nights of the 2020s?

Unreal.

The fund remains in good shape. It has a gym subscription with two hours personal training per week, and it regularly participates in marathons and Iron Man events.

From a linked article, a quote that basically describes the Federal Reserve

>It’s almost as if SBF found a way to hack the financial system, printing billions of dollars out of thin air against which he was able to borrow massive sums from unknown counterparties. Almost as if he discovered a financial perpetual motion machine…

Sure, but if nothing else, you can use federal reserve notes to pay your taxes. FTT can be used for what now?

That's the Treasury.

The Fed loans you money. If you confuse someone lending you money with them giving you money you have a problem.

So much FUD around this event. FTX is fine, they have a stadium and other high profile sponsorships.

lol

That is too much copium.

The Kroenke's will back FSB just like they backed Arteta, FTX will be top of the table this time next year remind me one year

"They've spent too much money to be out of money" is a really weird read of how money works.

I feel had this comment been on reddit, it would have been interpreted as sarcasm and received upvotes.

Really? In my experience, sarcasm doesn't fly on reddit unless you end with /s

Not sure if this was sarcasm, but during the transition from Dotcom Boom to Dotcom Bust, it was a bit of folk wisdom that if you saw a Dotcom rename a stadium, its shareholders best start selling and its employees best start job hunting.

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