I think it’s maybe more judicious to look at the culture these VC firms have fostered instead: one where law and civic interest are secondary at best responsibilities. Racing to an obscene valuation that gets saddled on public investors is the #1 priority.
It seems like every egregious mistake firms make somehow gets traced back to interest rates. A very convenient way to absolve people of responsibility.
I don't understand what's strange about it. Short term thinking spreads even among people who know better because of competition. If you're not taking the risks other people are, then how do you do business?
A fairly well known quote from a bank CEO is "As long as the music is playing, you’ve got to get up and dance".
The corollary, from that perspective, seems to be that government regulation is required to save industry because individuals can't prevent a crisis.
But do you expect parasites to start thinking ? They cant.
Sequoia put in their own website that the FTX CEO was playing a video game while pitching hundreds of millions of investment. The same firm would kick me out of the door if I went without a tie to interview for a secretary job.
Difference is that I dont promise a huge premium at a huge discount. And it's a red flag for any sentient when someone is distracted in a high stake conversation, but not to the Sequoia parasite only eating premiums.
Sure, I would be too. But you're not conversing with the people who did it, are you?
And since interest rates are negligible, there’s too much money chasing too few deals. Any VC that stops to do active due diligence is too late to close the deal.
Plus, if they don't chase returns, their competitors will, then they'll struggle to raise subsequent funds.
Market forces + low interest rates are a recipe for recklessness.