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Comment by JohnFen | Hacker News Reader

Very well said. It omits another point, though, which is that SV's cultural failure to reject con artists and abusive methods is what has led directly to the very dim view the general public increasingly has toward the industry. And that dim view is well-earned.

We as an industry really need to right this ship.

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SV does reject con artists, it's just that con artists love to fake associate themselves with SV and then people who don't know any better believe that the con artists are real because of that fake association.

(If you define 'SV' to mean only the major companies, VC firms, and big decision makers actually HQed in SV.)

This isn't a solvable problem, while still remaining a somewhat free country, since roughly half the population will always be below average in sniffing out dupes. So some fraction of con artists will always be able to succeed in duping some folks.

Of course there are a lot of SV entry level and middle management types that go bad since even a 2% corruption rate means thousands of people per annum at SV scale.

The major companies aren't "Silicon Valley" to the normal person, though. There was a reason the show "Silicon Valley" was about a startup and not some boring middle manager working for Google or Facebook.

There's obviously too many startups to form a solid impression of percentages but I don't think the rate of fraud in startups is noticeably higher then in any other major city. Some small fraction of startups, businesses, entrepreneurs, etc., will be outright frauds anywhere.

Maybe some viewers believed that literally 100% of the startup population has honest intentions, and then they become disappointed in reality?

> SV does reject con artists

The incredible amount of money Andreesen Horowitz poured into so many different crypto scams contradicts this. Not to mention the incredible amount of terrible companies which had business plans that were prima facie ridiculous.

Did you really expect a 100% perfect rate? i.e. infallibility?

No real system can accomplish that, even 99.9% is already a very high bar.

A16Z has a portfolio size of $35 billion and invested nearly $8 billion in pure cryptocurrency schemes (probably quite a bit more additional investment through some of their funds which aren't exclusively crypto plays). We're not talking "99.9% avoidance of obvious scams" or any other tiny fraction.

Their flagship crypto fund was down 40% in 2022. Even if it returned profits to shareholders since its seed investments in 2009, it did so at the expense of people who bought in later, like all crypto wins. They didn't "create value" they, at best, extracted value from crypto scams. And at this point it's not even clear to me how the fund is performing overall.

Yes but we're talking about SV as a whole, not a specific firm? If we assume a quarter of a16z's crypto investments will turn out to be actual frauds, which is a big assumption, that's only a small bit of all the money flowing through SV.

And plus I think even a 98% success rate of avoiding scams is already pretty noteworthy, like I said 99.9% is a very high bar.

Where did you get 98% from?

It's my personal bar for someone/some group to be considered honest. I'm not sure what 'reaperman's threshold is but I doubt it's literally 100% or even 99.9%.

So you’re asserting that it’s your belief that less than 2% of Silicon Valley VC money is invested in scams or invested to perpetuate a scam?

Besides A16Z, what are the other investment firms that you feel comprises the core of Silicon Valley VC culture?

No not really? Why would I be asserting that to you or anyone else?

Obviously I don't have access to the detailed financial records of every major player in SV, nor likely does anyone else on HN.

The “major players” post the vast majority of their investments because they’re advertising their funds to potential limited partners. It also publicly signaling the strength of the companies they invest in which improves their outcomes through ease of negotiating future business agreements with potential customers and partners.

So it’s definitely possible to establish an approximate upper and lower bound, and it’s way above your 2% limit.

You’d either have to accept that SV does, in fact, deal heavily in scams, or post-facto adjust your tolerance limit to set the bar lower.

What are you talking about? If you somehow know better then link or reference the sources.

Again: which VC’s do you consider the core of Silicon Valley business culture?

I did A16Z already. This only involves a very easy google search, and maybe throw in some crunchbase searches. It’s an absolutely trivial task and I’d expect you to try doing this exercise on at least one other VC that you’re interested in.

I could do an exhaustive analysis of public data, but that would be more of a blog post than a discussion comment. I expect you to put in a minimum amount of effort towards fact-checking if you want people to take your strong opinions seriously.

So if your not going to actually cite enough sources for your claims to be credible, why would anyone take your opinion seriously either?

For the third time: which VC’s do you consider the core of Silicon Valley business culture?

I need you to answer this question so that when I do the analysis I’m not wasting time analyzing investment firms that you don’t think represent Silicon Valley.

I’ll write the blog post for you. But not if you won’t participate in this discussion with a bare minimum of contributing effort. Otherwise it’s purely a one-way discussion, where I do all the work and you just say “no no no”. But I haven’t gotten a single constructive iota from you in this entire discussion. You’ve put in zero effort at all.

It seems your confused 'runnerup', your behaving as if I had initially responded to your comment, when in fact it's the opposite, even more so as you started asking strangely combative questions under a response I made for 'reaperman'.

Usual HN custom is to answer one question after the other user answers one, or two for two, etc., not to ignore them and immediately demand answers to subsequent questions. And I had already answered two without even getting an answer to:

>Why would I be asserting that to you or anyone else?

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