steve gattusoMar 20, 2023
Molly White
Reminiscing on when I pissed off venture capitalists with an offhand remark on Crypto Critics' Corner that VCs are not good for society with a new essay about the meltdown around Silicon Valley Bank: https://newsletter.mollywhite.net/p/the-venture-capitalists-dilemma
The venture capitalist's dilemma

The embarrassing investor meltdown surrounding Silicon Valley Bank should drive us to consider new models.

Molly White
Mar 20, 2023 at 12:59amWeb
Show threadMolly WhiteMar 20, 2023

I'm not venture capital-funded, so consider subscribing if you like my writing. 🥰

https://newsletter.mollywhite.net/subscribe/

Subscribe to Molly White

Tens of thousands of subscribers. Comprehensible coverage of the cryptocurrency industry and the broader technology world. Click to read Molly White, a Substack publication.

Show threadMolly WhiteMar 20, 2023
The clip is from episode 84: "Cryptocurrency Criticism in a Down Market", around 19 minutes in.
https://youtu.be/k4o86dEDGRo?t=1128
Cryptocurrency Criticism in a Down Market (feat. Molly White) - Episode 84

YouTube
Show threadMolly WhiteMar 20, 2023
guess this is where I find out if any VCs subscribe to my newsletter lol
Show threadWilliam PietriMar 20, 2023
@molly0xfff I laughed and laughed at this bit:
Show threadJohn Mark  ☑️Mar 20, 2023
@williampietri @molly0xfff I literally lol'd when I read that
Show threadDirk HohndelMar 20, 2023
@molly0xfff
Not anymore 🤣🤣🤣😎🤣🤣
Show threadDr. Fancypants, Esq.Mar 20, 2023
@molly0xfff *looks around nervously* Maybe one or two VC employees subscribe, and don’t find much to argue with…
Show threadJeri DanskyMar 20, 2023
@molly0xfff If you were using a platform other than Substack, I'd have subscribed a long time ago. But I can't ethically subscribe to anything on Substack. ☹️
Show threadmore jest than warrior (débil, enfermizo)Mar 20, 2023
@jeridansky
Hi, mind if I ask why? Thanks!
Show threadJeri DanskyMar 20, 2023

@contraculto For starters:

https://thehypothesis.substack.com/p/heres-why-substacks-scam-worked-so

https://www.isdglobal.org/digital_dispatches/anti-vaxxers-qanon-influencers-and-white-nationalists-flocking-to-substack/

https://www.theguardian.com/technology/2022/jan/27/anti-vaxxers-making-at-least-25m-a-year-from-publishing-on-substack

https://mashable.com/article/substack-covid-misinformation

https://mastodon.social/@jhpot/109604889214426745

https://mastodon.social/@ricmac/109596194828135932

https://me.dm/@anildash/109891943225094233

Here's why Substack's scam worked so well

They paid a secret group of writers to make newsletter authorship seem lucrative

The Hypothesis
Show threadmore jest than warrior (débil, enfermizo)Mar 20, 2023
@jeridansky
Oh wow, that's *bad*
Show threadWoodrow DouglassMar 20, 2023
@jeridansky @molly0xfff why not? Where else are independent writers producing articles? Medium i suppose, maybe Patreon?
Show threadJeri DanskyMar 20, 2023

@bigfishrunning For starters:

https://thehypothesis.substack.com/p/heres-why-substacks-scam-worked-so

https://www.isdglobal.org/digital_dispatches/anti-vaxxers-qanon-influencers-and-white-nationalists-flocking-to-substack/

https://www.theguardian.com/technology/2022/jan/27/anti-vaxxers-making-at-least-25m-a-year-from-publishing-on-substack

https://mashable.com/article/substack-covid-misinformation

https://mastodon.social/@jhpot/109604889214426745

https://mastodon.social/@ricmac/109596194828135932

https://me.dm/@anildash/109891943225094233

Here are alternatives: https://www.wired.com/story/best-substack-alternatives/

I'm OK with Patreon, too; I support about 9 efforts that way.

Here's why Substack's scam worked so well

They paid a secret group of writers to make newsletter authorship seem lucrative

The Hypothesis
Show threadJeri DanskyMar 20, 2023
@bigfishrunning Looking quickly at some newsletters I *am* subscribed to: One uses beehive, and three use MailChimp. I support them financially via whatever funding mechanism they've set up: Patreon, etc.
Show threadLuis VillaMar 20, 2023
@molly0xfff need a 🔥button
Show threadMichael GemarMar 20, 2023
@molly0xfff There should private deposit insurance that organizations like these could purchase for their full deposit. Then the government wouldn’t have to bail them out.
Show threadCiferMar 20, 2023
@michaelgemar @molly0xfff What makes you think they would make use of that?
Show threadMichael GemarMar 20, 2023
@Teskariel @molly0xfff They would if they were either mandated to, or if it was explicit policy to not provide bailouts to uninsured accounts. (I’ll grant there’s an initial chicken-or-egg problem — until it’s clearly needed it won’t be used, and it won’t be available until companies use it.)
Show threadPax Ahimsa GethenMar 20, 2023

@molly0xfff

This is really excellent. I hope your post gets widely distributed, as it's more broadly accessible than your usual posts about crypto (IMO, being not particularly knowledgeable about crypto nor economics myself).

Show threadtoxtethogradyMar 20, 2023
@molly0xfff And the Times seems to have grokked it...
https://www.nytimes.com/2023/03/19/business/economy/fed-silicon-valley-bank.html?algo=editorial_importance_fy_email_news&block=4&campaign_id=142&emc=edit_fory_20230319&fellback=false&imp_id=898162001&instance_id=88153&nl=for-you&nlid=99118613&pool=pool/a2fc9efa-4a9f-46ae-8506-967a38fc2099&rank=1&regi_id=99118613&req_id=457522701&segment_id=128240&surface=for-you-email-news&user_id=db0c53c36e2bac8cd6eae3fe7fa795fb&variant=0_edimp_fye_news_dedupe
Before Collapse of Silicon Valley Bank, the Fed Spotted Big Problems

The bank was using an incorrect model as it assessed its own risks amid rising interest rates, and spent much of 2022 under a supervisory review.

The New York Times
Show threadCrazyITGuy42Mar 20, 2023

@molly0xfff Very good! A lot of this goes back to the mid to late 1920's, with Milton Friedman and the Chicago School, and their idea that businesses should only answer to their shareholders:

https://en.wikipedia.org/wiki/Milton_Friedman

Freidman also assumed investors are rational (as we see, they are not).

Freidman also completely forgot about what happens when there is no regulation and the leaders take control - they ignored what happened during the Guilded Age (1870-1920s, IIRC). They failed U.S. History.

Milton Friedman - Wikipedia

Show threadMarcusCSCMar 20, 2023
@molly0xfff they I always wonder about VC, if a government fund or incubator would yield the same results
Show threadvirkonMar 20, 2023
@mcole @molly0xfff Isn't all about the long term decision making? Real innovation, that really makes sense, takes time. Most of the stuff I am seeing is hype.
How long until people realize that for example AI is just the same shit in a different color?
Show threadUnlettered PeasantMar 20, 2023

@mcole @molly0xfff
There are actually quite a few of them, and they vary in size and scale.

Famously, the Energy Policy Act of 2005 there was a loan program setup to fund clean energy technology development. It had a high profile failure in Solyndra, but also quite a few successes, and a default rate under 3%.

DOE still has several incubator programs (all around energy).

There are others spread across the Federal Government, though none I am aware of focused on general tech.

Show threadUncle 6 🌁Mar 20, 2023
@molly0xfff people don’t hate tech. People hate Zuckface, Phony Stark, and money people who think they must be tech because they paid for it. If it were 1987 they’d all be dealing junk bonds for KKR instead.
Show threadJohan HalseMar 20, 2023
@molly0xfff excellent article, clearsighted and with very precise deployment of ridicule
Show threadMikko AlasaarelaMar 20, 2023
Thanks for sharing, Molly! I'm a long-time listener of the ALL-IN podcast, and have to say I found your critique relevant and funny!
Show threadMortenMar 20, 2023
@molly0xfff
I think feds were right to release funds to depositors quickly because the bank had enough to cover like 80-90%, right? No reason to wait for the wheels of bureaucracy to turn. But I don't understand why they made everyone whole.
Show threadThomas DepierreMar 20, 2023

@molly0xfff I totally agree with everything you say.

But I think if we want to progress, it may be worth pointing out (as a few already do) that the VC class has not even been doing good to capital. They have not been good investments for their LPs. And we may want to start asking the LPs why they keep funding them despite the impact and the negative returns.

Show threadGadgetGavMar 20, 2023

@molly0xfff Boosting the heck out of this. Clear, precise take down of why it’s the billionaire VCs who are despised, not the “tech industry”.

Innovation is not a massive exit payoff for funds that were already impossibly rich to start with. If they did something worthwhile for society, they’d become appreciated.

Show threadVoronMar 20, 2023
@molly0xfff thank you
Show threadLazarou Monkey Terror 🚀💙🌈Mar 20, 2023
@molly0xfff all these Silicon Valley boys trying to fix the World but not realising one of the big problems facing Humanity is them.
Show threadGenoForPrezMar 20, 2023
@molly0xfff "privatizing profit while socializing loss" really conveys A LOT of badthink very succinctly. A great description.
Show threadJohn Mark  ☑️Mar 20, 2023
@molly0xfff your best yet - really clear and thorough analysis of the SVB debacle. I liked how you grudgingly admit that fdic insurance *cough*bailout*cough* was probably needed, but pointing out the hypocrisy and deliberate, bad faith machinations that drove us to this cliff edge.
Show threadCarlMar 20, 2023
@molly0xfff This may be my favorite story yet that you've posted. Well written and the David and Jason dilemma was brilliant.