Comment by yieldcrv
2 years ago
a lot of this is reputation laundering
the outside capital is real, quickly landing a lead investor that gets the other investors to close comes from controlling the pools of capital
your family’s donor advised fund and private foundation are the lead investors, or they are the only limited partners in the private equity fund thats functionally a family office
this same capability allows for top university background too, or nonchalantly dropping out of it
in the mean time you get all the headlines in the world, alongside your PR agent, and you’re a genius star Stanford drop out that gets funded no questions asked
The “friends and family round” is actually more important than the stanford aspect, if we were really min-maxing here, but it all goes hand in hand as people with that support system do things together
the reason it is important to view it this way is because this is all window dressing for a bourgeoisie that doesnt want to be seen as different. in turn, it makes everyone else think they really have a chance of receiving the same consideration from their ambition and cognitive abilities. the answer is to just have capital and a predilection for de-risking with other people’s money.
I've never seen a donor advised fund or private foundation on a startup cap table, and I've seen quite a few. Got any examples?
have you checked the incorporation status of every entity on the cap tables?
this would be difficult to know from a passing glance, they wont necessarily say any combination of “Charitable Non-Profit Foundation”, although I have seen that on cap tables and other disclosures
they can be any entity type and trusts. Trusts dont need to have “Trust” in the name
donor advised funds are not separately incorporated, and may also be on the cap table as the sponsoring charity
and again, as a limited partner in a fund, neither would show up on the cap table, just the fund they invested through