Comment by SirensOfTitan
9 hours ago
According to Crunchbase, Massdrop raised ~92 MM through their series C, and then another ~40 MM in debt over the last couple years.
There is no way that MassDrop was ever going to justify that kind of capital investment. VC is such an inefficient and frankly delusional form of capital deployment at this point -- they have no idea what they're doing. It ironically looks a lot like central planning, where the VCs themselves invest with the intention of picking the winners and losers themselves.
This company should've bootstrapped and remained small-and-manageable. Not every business, not even most businesses, should raise money with the intention of becoming a "unicorn," it is nonsensical and this model has a lot of deleterious effects for our society, namely and most obviously enshittification when the outcome doesn't justify the investment.
> VC is such an inefficient and frankly delusional form of capital deployment
Can you suggest other saner forms? For example, having experts pick, government pick, or only one single debt instruments all have problems with the kinds of investments VC funds, not to mention that they also have their share of ludicrous and bad investments.
Also please suggest how you’d stop VC as is at its core a private investment club - you and other investors get together to invest capital into a profitable but risky venture. The only way to stop it would be to either ban private capital or to ban coordination of capital which on net ends up significantly worse.
Nobody needs to stop VC or speculation. The issue is that society has been structured to subsidize hyper speculation, which current VC landscape is a symptom
Im no expert, but thoughts:
1. Large firms investing in early r&d instead of aquisition.
2. Its a symptom of decades of poor economic policy rewarding speculation, to a scale that impacts society by disencentivizing stable investments that benefit humanity. Main lever causing this is through Federal reserve poor policy since 200
Large firms investing in early r&d happens regardless. It does not explain how you build new business on an idea you can’t convince large org politics to try.
It’s also what Xerox and Bell labs were doing in the 70s and what Google, Meta, Amazon, Apple, Microsoft etc are doing today but it took smaller more nimble players to actually do anything with the research. Case in point: transformers came from Google.
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