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Comment by ryandrake | Hacker News Reader

I wonder if those other reasons simply were the guy's background and pedigree. Silicon Valley is no different than Wall Street in its obsession with having the "right" educational background, having the "right" parents, having the "right" connections and so on. So many doors in corporate hiring can be bypassed with "Went to MIT" and "Stanford parents" and I wonder if they can also be bypassed by founders looking for investment.

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That's at least one strong reason - VCs look at the person as much as the business.

Crypto was filled with sleazy car-salesman "investor" types at the time Alameda Research was looking for funding. So when in came someone with a Jane Street background and not a single flashy Ferrari in their driveway, the dam broke on VCs finally being able to pour money into the crypto space on a decent looking founder.

If that's how unsophisticated these VC operations are then I think we'll see a lot of them lose their shirts in the coming macroeconomic environment. Which will consequently make future funding rounds all the more difficult.

VCs only need to roll a crit hit on a 1d20 to stay afloat.

They're not going to lose their shirts, not as long as insanely wealthy people like to gamble.

Unless the Fed blinks.

Just today the Fed governors stated inflation has not been sufficiently curtailed... https://www.cnbc.com/2022/11/17/feds-bullard-says-rate-hikes...

Sure, I'm just curious how we'll deal with interest payments on our debt, especially since our economy has evolved to thrive on low rates. The hikes are necessary, but I think they're going to kill a bunch of BS jobs, meanwhile we'll have to raise taxes to service the debt. Gonna be real interesting.

Nation debt isn't like a personal checkbook. As long as the economy grows just as fast or faster than the debt over time, then they're okay.

Sure, but we made the economy grow by keeping debt cheap. Now debt will be expensive and all signs point to the economy not growing in such an environment.

The closer to an election, the more likely the case

I am slightly baffled by this comment since my first impression of him was exactly "sleazy vibes". Not in the flashy Ferrari sense but because the look seemed to try so hard to be the opposite of flash - the nasty stretched out t-shirts, shorts and forever bed-head hair. It struck me as a contrived and something of a put on. Google "John Blutarsky Animal House." SBF appears to have patterned his look after Jon Belushi's character in that movie. I think you have to make an effort to look like that so consistently, especially when there are cameras around.

I can confirm that this kind of look is not at all atypical in the quantitative prop trading world and it's not contrived.

Well if it's so common as to be a kind of uniform isn't that the very definition of contrived? How else would you explain the phenomenon then, that slobs just naturally gravitate towards prop trading?

Plus both his parents are professors at Stanford Law school. I can see VCs having a natural bias towards "it would be unlikely for someone with this pedigree to operate so completely outside the law".

Unless - hypothetically - some of them were looking for someone who would operate outside the law, but with pedigree and credibility.

There was a lot of money involved. There was a huge network of shell companies to hide it.

VCs, who are supposed to know what due diligence is, looked at some hilariously unprofessional books and said "We like the look of this."

Is it unreasonable to wonder what was going on?

SBF had huge sleaze vibes, so I don't know if your logic applies.

> and not a single flashy Ferrari

the article mentions his $30 million dollar penthouse ... It seems the only place the flashy assets didn't exist was in the press coverage put out by organizations SBF gave money to...

SBF branding himself as an effective altruist and even purposely dressed in the silicon valley "genius" attire. His condo in the bahamas was after he hit it big and needed to be close to Washington to work on crypto regulation.

There's a huge gap between that and the majority of crypto founders at the time.

>the article mentions his $30 million dollar penthouse

the $30M penthouse in the Bahamas that was purchased using investor money and customer funds... he didn't own it at the time he received funding from these big name VCs, did he?

Nice real estate and art send a very different signal than an exotic car, even if they're kind of high-life blingy.

Don’t VC always say they invest in the founder not the company? It’s all about how that person makes them feel. Some argue that is why there is less diversity in VC funded companies.

It's like the "cultural fit" hiring criteria loophole, which allows companies to deliberately cloud their hiring decision-making by incorporating vague and bias-fraught inputs. It's a way that an organization can claim they have measurable, quantitative criteria, while allowing themselves to override that criteria with their gut feeling when they want to.

Just based off that news article with how much the VCs were delighted after a call with SBF while he was playing League of Legends it certainly seems like they base most of their investing off gut feeling and "vibe check" vs actual fiscal due diligence. Which is how charismatic quirky founders like Elizabeth Holmes, Adam Neumann and now SBF keep finagling big round raises.

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