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Comment by matrix_overload | Hacker News Reader

You are missing the key point. It's not hard work, skill and luck.

The Fed has been on a money-printing spree since 2008 [0]. The idea was that it would create jobs and stimulate economic activity. In reality, it lowered the bar for things considered investable, so the Ivy-educated VCs were trying to tap into that stream of cheap money, while paying themselves handsomely. Either get acquired (using cheap debt that will also be used to pay the acquiring execs) or IPOed (using the excess money from the public). Profitability was out of question for at least a decade.

[0] https://tradingeconomics.com/united-states/money-supply-m0

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The Fed doesn’t give VCs money.

It prints money, that money flows into institutions and chases returns. Much of it flows to VC, guaranteed. That’s what the Fed was literally created to do.

New money is created through bank loans, or monetizing government spending, or emergency asset purchases by the Fed – none of which are the typical source of VC funds.

From https://hackernoon.com/the-macroeconomics-of-venture-capital...: "when the Fed engages in quantitative easing, it goes a step further and attempts to keep returns for longer-term bonds down as well. In the United States, this meant the purchasing of mortgage-backed securities and government bonds. (In Japan, central bankers have had to utilize even more extreme measures, going so far as directly buying not only government bonds but also stocks on the public market). By bidding up the prices of long-term bonds through quantitative easing, the Fed forces investors to seek returns in even riskier assets, such as equities.

As investors flow into the equity market, stock prices are bid up to the point at which expected returns for stocks also become unattractive. At this point, the logical next move for global, institutional investors is to move to more risky investment options such as private equity and venture capital. This is exactly what we’ve seen."