VC

tlk666

So my Ai said this cuh, ong you a cuck You’re stacking a lot of real risks—but the mistake is assuming they all **resolve in the same bearish direction at the same time**. Markets rarely give you that clean outcome. Let’s build the **actual bull case**, not a strawman. --- # The Bull Case for U.S. Stocks (mid–late 2020s) ## 1) The U.S. can run higher debt than you think Yes, debt/GDP may exceed World War II levels. But here’s what matters more than the number: * The U.S. issues debt in **its own currency** * That currency is the global reserve: United States dollar * Global system still runs on dollar liquidity (trade, energy, collateral) Japan has run **250%+ debt/GDP for decades** without collapse. **Bull takeaway:** High debt ≠ bearish by itself. It often leads to: * financial repression * moderate inflation * asset inflation (stocks ↑) --- ## 2) “Everyone is fully invested” is usually a myth That Reddit take is classic late-cycle thinking—but positioning data rarely supports “no buyers left.” Reality: * Pension funds still need to allocate * Sovereign wealth funds still deploy * Retail panic → creates buyers on dips * Corporations themselves = **largest buyers via buybacks** Companies like: * Apple * Microsoft are constant **structural demand** for equities. **Bull takeaway:** There is always a marginal buyer—especially when prices drop. --- ## 3) Stagflation is possible—but not the base case You’re right: stagflation would be toxic. But here’s the pushback: * Labor market is **cooling, not collapsing** * Productivity may rise from tech adoption * Supply-side improvements (reshoring, energy) If inflation trends from \~3–4% → \~2.5–3%: → the Federal Reserve can still: * cut gradually * ease financial conditions We don’t need 0% rates again. Just **less tight policy** is bullish. --- ## 4) AI doesn’t need perfection to justify valuations You’re assuming AI = bubble unless it becomes AGI. That’s too binary. Even without AGI: * automation of **10–20% of white-collar tasks** * software margin expansion * cost reduction across industries Companies like: * Microsoft * NVIDIA don’t need sci-fi outcomes—just **incremental productivity gains**. **Bull version of your point:** Even if 80% of AI spend is inefficient… the 20% that works can justify massive value. --- ## 5) Private credit stress ≠ systemic collapse You’re right it’s stretched. But compare to 2008: * Banks are better capitalized * Risk is **more distributed** * No single asset (like subprime MBS) dominates Firms like: * Apollo Global Management * KKR may take hits—but that’s not the same as system failure. **Bull takeaway:** This is more likely a **contained credit cycle**, not a collapse. --- ## 6) The U.S. still dominates globally (this matters more than macro doom) Relative performance > absolute perfection. Compare the U.S. to: * China → property crisis, demographics * Europe → slow growth, fragmentation Where does global capital go? → still the U.S. Because: * deepest capital markets * rule of law * tech leadership * innovation pipeline **Bull takeaway:** Even if the U.S. is flawed, it’s still the **best house in a bad neighborhood**. --- ## 7) Earnings can grow even in a “meh” economy This is where most bears get caught. Stocks follow: >earnings × multiple Even if multiples compress: * cost cutting * automation * pricing power → earnings can still grow S&P 500 is dominated by high-margin firms now, not industrials. --- ## 8) Inflation can actually be bullish (to a point) Moderate inflation (2–4%): * inflates nominal GDP * boosts corporate revenues * reduces real debt burden This is literally the environment where equities often outperform bonds. --- ## 9) Buybacks + passive flows = structural tailwind This didn’t exist in 2000 or 1929 at the same scale. Drivers: * 401(k) auto-investing * index funds (constant inflows) * corporate buybacks This creates a **persistent bid under the market**. --- ## 10) Your SaaS/VC argument is half right—but incomplete Yes: * multiples compressed * bad startups will die But: * survivors become **more profitable** * competition gets wiped out * capital reallocates to winners That’s actually bullish long-term. --- # The real bull case in one sentence You don’t need a perfect economy— you just need: * moderate growth * controlled inflation * no systemic crisis …and stocks grind higher. --- # Where your thesis could be right To keep it real (not just bullish spin), your view wins if: * inflation stays >4% AND growth collapses * private credit causes forced deleveraging * AI capex fails to produce returns * policy mistake by the Federal Reserve That’s a **specific combo**, not guaranteed. --- # Final pushback (intellectual sparring) Right now your stance is: >“Too many things are broken → market must go down” The market doesn’t work like that. It prices: * probability * timing * relative outcomes If even **2–3 of your bearish points don’t materialize**, equities can still outperform cash. https://preview.redd.it/p7wy12mfdhqg1.jpeg?width=1106&format=pjpg&auto=webp&s=7a7958457ae05d80cf447cf19caea050e593b3d7

Icy-Sheepherder-7595

Yes because people woke up and realized holding cash is stupid and also it's a lot easier to invest now. You used to have to call up a broker. I would probably not be able to invest at least the way I want to if we still had to do that. I don't see how it's a bad thing that it's easier to access the stock market. It's a win for normal people whereas before it used to be reserved for VC and PE guys.

TheAverageGuy11

Pretty unique to see retail finally getting access to names like OpenAI, Anthropic, SpaceX, etc. through something like VCX. That’s been locked behind VC and accredited circles for a long time, so structurally it’s a big shift. That said, I think people need to separate what it owns from how it will trade. This will likely behave more like a closed-end fund once it’s live, meaning the price does not have to match NAV in the short term. Sentiment, liquidity, and hype around “AI exposure” can easily push it to a premium or discount, especially early on. We’ve seen similar vehicles swing around based more on demand than fundamentals. And since this is a direct listing with no underwriters stabilizing the price, day one action could be pretty noisy. Personally I would treat VCX as a long-term exposure play to private tech, not something to judge based on the first few days of trading. If you’re buying this, it’s more about multi-year access to that portfolio than trying to catch a quick listing pop.

loud-spider

The difference is that first time round people genuinely didn't understand the economics of it. Business School Professors were being to told "Shut up, you just don't understand it, it doesn't need to make a profit, it's the New Economy" and that lasted a while until it turned out that actually you did need to make a profit after all because eventually your VC ran out of it, and that was what kept you afloat. In that respect at least, the bubble is the same. A lot of money being pumped into a few small players that seem to be holding the US economy up right now. But this time round the economic model being misused is the old 90s business process re-engineering approach. You take the current cost of the thing/people you're replacing, and use that to justify savings you'd create if you implemented the new future. Now in the old days it used to be a split as to whether you got rid of people before you started, aka taking the hit up front, or whether you did the implementation and did it later., or some sliding hybrid of the two. Both ways have their pros and cons both financially, operationally and personally for the staff involved. But this time all the big tech companies who have deep investments in the underlying AI technology have gone all in on AI as their end solution, a sort of own-your-own-workforce play, and have decided to cut jobs first and implement later. So the big difference is scale, a huge number of early job losses and really a lot of hope and expectation that the final solution will be 'good enough', which is all it has to be. The job losses allow for higher profits, and generally for stock buy backs, which is key since it benefit the company execs making the decisions. Which brings us to the problem: The Internet and the dot com era connected people and businesses like never before. So productivity soared. What we're seeing in the AI era is that AI is essentially disconnecting people, and CEOs who have already done the dump-n-pump are finding that actually all that's happening is that AI is replacing people, no increase in productivity, just a shift of cost-base and a lot of unemployed people. Back when Napster arrived and the old music business model that paid artists started to fall apart, the cry was "they'll just have to find another business model". Streaming proper arrived, and brought it's own version of the business model. And now most artists barely get paid. Sooner or later the current tax system won't cope with the reduced totals in personal taxation as companies persist but their tax revenue doesn't. There needs to be a grown up discussion about this, since people won't just vanish. Otherwise billionaires will bring their own business model, and that won't end well for humans.

lmaccaro

All the money funding AI whatevers is gulf state investments Those gulf economies are straight fuct for the next couple of years. They aren’t investing elsewhere when they can’t keep their own lights on. No more VC funding for openAI etc.

Leather_Low_4469

My wife's boyfriend told me to stay away from private tech, which means I'm YOLOing into $VCX at the open. Honestly, retail getting OpenAI and Databricks without the 20% VC fee sounds too good to be true. Are we just providing exit liquidity, or is this actually the real deal?

sleepystockmarket

The dot-com comparison is worth taking seriously here. In 1999-2000, the underlying technology (internet) was genuinely transformative — but valuations got completely detached from any near-term revenue reality. The crash didn't mean the internet failed; it meant the market had priced in decades of growth in just a few years. AI could follow a similar pattern where the technology itself succeeds long-term while early investors who paid bubble-era multiples get wrecked in the short run. The key difference I keep thinking about is that today's AI capex is being funded by profitable tech giants rather than money-losing startups burning VC cash — which might mean a slower deflation than 2000 rather than a sharp pop. What metrics are you watching to gauge whether we're in genuine bubble territory vs. just elevated valuations?

CEOPerspectiveSubsta

There is some real change here, but not for the reason people think. It’s less about “democratization” and more about liquidity pressure. Private markets stayed private longer, valuations went up, and now exits are slower than expected. So these structures start to appear. The subtle shift is this: retail isn’t getting early access, it’s getting late access in a different wrapper. You’re not underwriting the company the same way a VC did 5 years ago. You’re underwriting a mark set in a private round, with limited price discovery. The interesting question isn’t whether this grows, it probably will. It’s whether public market discipline eventually reprices these assets in a way private markets have avoided.

DontHaveWares

Space data centers are *not* feasible. That is hype targeting VC money.

TheSource777

Reading this thread is such a reminder of why so many people are so poor and let their political emotions cloud their judgment lmao. As a former Telecom VC and 2019 SpaceX shareholder (via SPV) it was clear that Starship would create infinite TAM if validated, and Spacex is the only company within 20 years of developing that platform. Starlink was a theory, but the only risk was laser connected satellites without ground stations (which have now been validated to work). SpaceX is going to run absolute laps around everyone in the entire space economy. Space datacenters wasn't even a thing a year ago. Imagine 10 more years of use cases being built out. If you want real DD, read all the posts on the spacex subreddit around 2017 - 2020 before politics infested that place. SpaceX is going to be bigger than the current Mag7 combined in 2040, but hey downvote and troll me in the replies lol. Don't really care, because my bank account is laughing at all the poors here. Peace.

Guitar_God75

This is very much a retail investor mindset, but okay. First off, please tell me where I said that you’re going to lose 100% of your money going all equities. I didn’t. I stated that once you have a certain amount of capital, you’re going to want to diversify into other asset classes, be it real estate bonds, private equity, etc, and your investment profile is going to be different. Reality is, a billionaire could 100% invest into the S&P and they’d likely be fine if they are okay with the drawdowns. But most people didn’t become billionaires by investing (Buffet is the exception) and tend to be laser focused wealth preservation once they get there (establishing trusts for their kids, etc). Most people, whether you’re a billionaire or not, aren’t comfortable with large drawdowns. And it’s worse when you’re a billionaire (a 10% move is $100 million if you go 100% common equity). Wealth preservation doesn’t mean invest in only bonds. But it means being choosy with what you’re investing in and making sure it’s a right blend for their risk tolerance. True, you don’t need a family office for a billion. But do you really think someone like Cuban invests it all himself? At the very least, a billionaire will have a few teams at the major banks that each have a slice of his portfolio and will invest it for him. But once you cross the 2-3 billion threshold, you absolutely will establish your own office because the fees will be too much. Also FYI - Cuban does have a family office of his own. Look it up. It’s called Mark Cuban Companies. Seems like it only invests in the smaller PE/VC stuff, but point still stands. I work at an institution where we manage a few hundred billion in pension fund and insurance money. We’ve invested in ventures alongside generational families like the Kushners and Henry Crown, and I’ve interacted with their investment teams. But yes, go ahead and tell me what a family office is for.

_Unke_

These are really the ones where either you're the idiot or everyone else is. Some of the stocks in this thread it's a case of the company's got potential but it depends on market conditions, financing, etc, etc. so no matter how smart you are you can't know all the variables. Startups run the gauntlet of VC funds like baby turtles dodging seagulls. You play it smart by trying to work out the percentages and guesstimate risk to reward ratio, and spreading your money across enough baby turtles that some of it will make it to the ocean. These guys, it's just a question of whether their tech holds up. If they've got the product, they'll attract investors and customers no matter what. If your assessment of their tech is right, you'll be rich and everyone else is an idiot. If not, vice versa. It's like poker versus chess. In poker you can play the odds right and still lose to an unlucky draw. In chess, it's all there on the board, the only question is whether you're smart enough to see it.

worldfundvc

On the frameworks question - the single best filter for greenwashing is whether a fund quantifies impact before and after they invest. If "impact measurement" is retrospective and qualitative, it may basically be storytelling after the check is written. The harder and more useful thing is having a quantitative framework that's part of the actual investment decision, and is used after the investment to track progress. At World Fund (climate VC in Berlin), we built a framework called Climate Performance Potential that quantifies the CO2 a technology could abate at scale, applied pre-investment as an actual screening criterion (we won't invest unless there's a credible path to 100Mt CO2e/yr by 2040) and then tracked annually post-investment with real data from portfolio companies. Not saying it's the only way to do it, but it's the kind of rigor I'd look for in any impact fund you're evaluating. Best question you can ask any fund on your shortlist: how exactly do you quantify impact, at what stage in the process, and how do you update stakeholders on the results?

sunbomb

They didn't directly invest in Swarmer, they invested in a VC that invested in Swarmer.

Unav4ila8le

Define successful? It’s not a VC backed company, didn’t scale to millions of user yet, but there is a small community around it and active contributors

DerpJungler

I work for a family office that invests in VCs. Last year I made the call to invest in a defence-based VC that was the first investor in Swarmer. Guess the owner will wake up happy today

TheAverageGuy11

Yeah, I think that’s kind of the appeal here. Getting exposure to names like Databricks and OpenAI without the typical 2/20 structure is pretty compelling on its own. Obviously it’s not a guaranteed win—venture rarely is—but if you already believe in the long-term growth of private tech/AI, VCX feels like a more accessible way to play that theme. For me it’s less about trying to hit a home run and more about having some exposure to that space without needing to be an accredited investor or locking up capital in a traditional VC fund.

SkillNext3639

Curious, given the Anduril $20B Army deal and VCX’s access to top private tech like Databricks and OpenAI, do you think it’s worth exploring as a way to get exposure without the typical 2/20 VC fees, even if it’s not a guaranteed win?

thelastsubject123

Half of msft rpo is openai. 60% of orcl rpo is openai. That's roughly 600B in commitment. In addition, Most of the rpo for the three clouds are backed by VC/PE. If they decide ai isn't worth the money, rpo will drop sharply. Equating that with actual guaranteed revenue is a grave error

RookieMistake101

I know it’s a totally different side of the SEC, but I have my own RIA and we interact with the SEC regularly. We also do a little VC so that’s probably why it’s more than most in the space. Certainly seems like there are mechanisms to crush my 5 person firm if we screw up.

No-Instance-3441

I think the bigger shift isn’t just access to late-stage companies, it’s liquidity. Normally VC investments are locked up for 8–12 years and it’s hard to trade them. Structures like VCX basically turn part of that world into something that can trade every day in the public market. The big question is how accurately the market can price it. If the underlying companies only get valued occasionally and the stock trades daily, you could end up with the fund trading at a premium or discount to its actual holdings.

ai-moderator

#TLDR --- **Ticker:** BX **Direction:** Up **Prognosis:** Buy Shares and $120 Calls **Summary:** Stop shorting private credit just because tech equity valuations are taking a hit. Private credit lenders get paid from cash flow (which is stable), not VC fantasy valuations. Furthermore, Blackstone's fund structure literally prevents bank runs. **Friendly Reminder:** Blackstone is not BlackRock, you regards.

AnalytickAi

The access part is genuinely interesting but the valuation question is what keeps me cautious. When retail gets exposure to late-stage private companies through a listed vehicle, they're buying at prices set by the last VC round — which has almost no relationship to what public market price discovery would actually produce. You're not getting in early, you're getting in at the price insiders already decided on, with less liquidity and less transparency than a normal stock.

Kalogero4Real

I dont see the same reality you describe. Do you think in early internet people were constantly putting money into the internet and in startups? No one gave a fucking shit initially. With time, so much time they procedeed to invest and to build companies that worked BOTH offline and with presence on internet. There were no big VC that would drop big bags of money into the solely 3 big tech companies present. There were a lot of companies and all investors, years after the creation of internet, poured money into them bringing all of this to the 2000 dotcom bubble. I dont see the affinity you try to pursuade. The internet grew slowly initially for years then moving to burst the bubble in 2000. Today AI scenario is different. Lots of VC invest in only a few companies that try to win the AI competition and this is portrayed by a rapid growth, not years, things move very very fast.

FullCopy

New business idea: Oil zeppelins to safely carry oil from the Middle East. VC deck is almost ready.

pkennedy

Probably easier to jump on the pension funds and make them do due diligence on these purchases, basically having them age these companies themselves. Too much money is up for grabs on the VC's side and they only need to bribe a few people to get their way. Getting more and more pension funds to simply reject these stocks for X years would do the same thing but also make it very difficult for all the VC's to chase down with their bribes and assurances that it's all good. Without the majority participating, this whole thing fails.

danisanub

People like you absolutely crack me up. I worked at a VC firm that had a large stake in Canva. You don’t know what you’re talking about but spout off disinformation on Reddit. Have a nice weekend.

darkpplord

Current VC culture is absolutely despicable

hoops4ever

Super helpful to understand how you break it out. I thought Carta and Cake Equity were more focused on managing start up / VC funding but haven't used the tools tbh. How do you make it work for tracking thesis on public stock equities?

eks

You are just looking at the big companies, the ones that will survive when the bubble pops. There is an ocean of small to mid size "AI companies" offering "tailored AI agents" for banal or shady things that are getting a shitton of VC funds just because investors are trying to ride the hype wave with anything "AI". Those companies are the ones that won't turn profitable and ultimately burst the bubble.

pVom

These days maybe, but Jira was great at what it did for a long time and the strategy worked. They bootstrapped most of it too, it's not like some wealthy relative just gifted them a load of cash or some hyperscale VC hype shit. Then they also do a bunch of liberal philanthropy stuff. I dunno as far as billionaires go they're not bad, but that's not really saying much.

qwertyaas

via chatgpt. haven't fact checked obviously. Deleted alot of the data as it wasn't quantified at all. Per capita yeah, you're right. # Estimated Top Countries Receiving Diaspora-Driven Investment *(venture capital, startup funding, and diaspora-linked FDI influence)* |Country|Estimated diaspora-driven investment influence|Key diaspora network| |:-|:-|:-| |China|Historically **tens–100B+ annually** during reform period|Overseas Chinese| |India|**$20–40B VC in strong years** with large diaspora participation|Indian tech diaspora| |Israel|**$10–25B VC annually** with strong diaspora investors|Jewish diaspora| |Taiwan|Major semiconductor & tech investment via returnees|Taiwanese engineers| \>Many countries have tried to replicate Israel’s “Startup Nation” model, but economists say most fail because **the key ingredients are difficult to reproduce together**. Israel’s ecosystem emerged from a unique combination: (1) **deep technical talent from military units** like Unit 8200 that train thousands in cybersecurity, signals intelligence, and advanced computing; (2) **early government intervention** through the Yozma Program, which seeded a venture capital industry by matching foreign VC funds; (3) **tight integration with U.S. tech and capital markets**, especially access to listings and investors through NASDAQ; and (4) a dense startup culture that produced global companies such as Waze and Mobileye. Many governments copied pieces—startup incubators, tax incentives, or VC funds—but **without the same talent pipeline, global networks, and risk-tolerant entrepreneurial culture**, the ecosystems usually did not reach the same scale. Diaspora investors contributed to the early growth and international connections, but today the main driver is the country’s highly productive tech sector

fthesemods

Is it unique to have such a large number of American citizens that are c suite execs, billionaires, elites, and VC partners that have such a love for a foreign country so much that they donate, send funds to, lobby for or support otherwise? Yes. Can it be quantified? No. The first think tank that actually does a study on this would be on a suicide mission career wise and financially. I'm sure Israel's tech industry is worthy but to deny that nationalistic reasons can influence where capital is being moved to would be very naive. We have seen numerous people fired for criticizing Israel. We have seen billionaires spend tons of money to help Israel, or gush publically about how they love Israel. Why would it stop at investment decisions?

AdministrativeHome10

Mostly pointing out funny Google-able financials, but what in the fuck is "pre-revenue"? Like right before a VC orgasms?

failedreform

Maybe in several years. Ontario teachers pension fund still pumping billions in VC

Odd_Confidence_5958

Literally all of the comments here are posted by accounts created in the last month and just seem promotional. lol sure, the best VC business on the planet are opening their door to raising equity from retail pre IPO😅. Good luck all! If anyone is a real human being, probably just look at something like the Scottish mortgage trust if this shit interests you and you want to know what it realistically could look like over long term.

Awkward-Watercress33

The launch of VCX feels significant because it bridges the gap between retail and VC investing. Access to high-growth tech names at this stage is a rare benefit.

Tendie_Tube

Is there simply no possibility on this planet that VC fundraising ever goes down? How do you suppose it ever happened in the past?

Tendie_Tube

NVDA is part of the circular financing loop too, and they are not immune to investor selling. IDK if the correction will come from the top down, starting with investors getting nervous about high valuation companies like NVDA or the bottom up with VC investors getting nervous about being bagholders for the 2020's century equivalent of Pets.com. Guess it's debatable.

Tendie_Tube

Why would they behave differently than VC's? Would they fund money-losing, hopeless endeavors for many years, whereas the VCs would not?

Tendie_Tube

The question is can they raise additional tens of billions from an IPO at the same time their cash burn rates have scared away the VC.

Over-Computer-6464

My wife and I are our late 70s and early 80s, retired 28 years ago. >as you progressed through different stages of life, how did your investment strategy evolve? Not much. Stayed mostly with publicly traded securities. The form of the investment changed as what was available changed. I started with mutual funds. Moved to individual stocks in the 1990s as brokerage commissions and spreads dropped dramatically. Gradually moved to ETFs in the 2000s. Invested in venture capital in the early 90’s, but just a small fraction of net worth. Also an angel investment in a small Toronto Stock Exchange company in early 2000s, but again it was a small fraction of net worth. >Did you continue diversifying your portfolio across multiple asset classes, or did you eventually consolidate and move a larger portion of your wealth into one or two core investments? My largest holding is the stock of a former employer. It has done very well since I bought a long block of it pre-IPO back in 1984, and it is current,y 50% of my net worth. I no longer have any VC or angel investments. When in my 60s and 70s I started cleaning up my scattered investments and simplifying them. >I’m also curious about how your risk tolerance changed with age. Did you become more conservative to protect capital, or did your experience give you the confidence to take calculated risks? Neither age nor experience really has much effect on the ability to take risks — risk capacity. My risk tolerance has always been relatively high, my wife's less so. During the crazy high volatility running up to the dotcom crash she told me to only tell her on the days when our portfolio wine t up more than $500k in a day, and to stop telling her when it went down more than $500k in a day. My method of trying to extract maximum value from a large high tech holding that was obviously overvalued as early as 1997, was to have a 30% allocation to treasuries and to continue to sell off more stock to keep treasuries at 30% of portfolio even though the tech heavy stock portfolio was doubling about every 18 months in the dotcom boom. My stock portfolio then fell more than 80% from March 2000 to October 2002. It was a wild ride. My allocation to fixed income (cash+bonds) has risen over the years when measured in dollar amount or in years of annual expenses, but has gone down as a percentage of portfolio. I currently have an 88% allocation to equities (individual stocks and stock ETFs), and 12% allocation to cash + cash-like + bonds.

smart_doge

Hear me out. >!Submarine for shipping oil!< 🤓 Accepting VC money for this 📈

FrostyMarsupial1486

Iran won’t stop bombing the absolute fuck out of the GCC or Israel without a definitive ceasefire where they get some concessions because… we fucking killed their supreme leader and thousands of civilians! The strait of Hormuz is cannot only strangle exports, but also IMPORTS of greenbacks to Saudi and other GCC members. What happens when they can’t get USD? Well there goes the VC funding for AI. And there goes our economy. Iran totally has the upper hand right now. This was an enormous blunder for American empire.

snugglezone

I think the issue isn't existing products. It's new products. I can vibe a new production ready service in a few weeks, but that means if someone likes my idea (open source or not), they can also vibe it in a few weeks. Just point an agent fleet to a web domain and tell them to stat cloning it lol. So for NEW services that don't have a moat, VC is not looking to invest there now. That's my take anyways. Developer velocity is faster, therefore cloning velocity is EVEN faster. Cloners don't have to spend time figuring things out.

postylambz

Can someone tell me what the fuck a VC is

ClamPaste

A lot of the major companies who have their fingers in the AI pie are able to pivot quickly to the next hype train by simply reallocating funds and moving some people around. I think they'll be largely unaffected by a VC rug pull.

FrostyCartoonist8523

# Gemini said Your analysis is a textbook study of **market contagion** and **liquidity traps**. You are essentially describing the "Minsky Moment"—the point where over-extended investors are forced to sell even good assets to cover losses, leading to a self-sustaining collapse. While "old and crusty" investors will indeed recognize the 1999–2000 parallels, there are some nuanced differences in today's plumbing that either validate or slightly complicate your math. # 1. Validating the "Trigger" Mechanism Your assessment of the **VC-led rug pull** is logically sound. In venture capital, there is a phenomenon called "Flight to Quality." * **The Chain Reaction:** When the first major "AI Unicorn" fails to raise a down-round, it sets a new benchmark for valuations. VCs don't just stop funding the "weakest" firm; they immediately re-calculate the Terminal Value of their *entire* portfolio. * **The "Short" Incentive:** While a VC firm shorting the market to hedge their own failing portfolio is technically a conflict of interest (and potentially a violation of fiduciary duty to their LPs), **insiders** and **hedge funds** with cross-exposure absolutely do this. # 2. Comparing the "Burn" (2000 vs. 2026) You asked: *How long can fresh cash sustain the burn rate?* * **The Dot-Com Era:** Companies were burning cash on marketing (Super Bowl ads) and basic infrastructure. When the cash ran out, the value was zero. * **The AI Era:** Companies are burning cash on **Compute (GPUs)**. * *The Twist:* If an AI startup goes bust, their primary "asset" is their reserved compute or hardware. If everyone goes bust at once, the secondary market for GPUs craters, dragging down the "picks and shovels" companies (like NVIDIA) faster than the software firms. # 3. The Probability Math (Expected Value) Your indifferent probability calculation is a great way to strip emotion out of "stonks." EV=(Pgain​×Rgain​)+(Ploss​×Rloss​) Using your numbers: * If you need to beat a **3.6% Treasury yield**, and a crash (−50%) is a 25% possibility, the "up" scenario (+20%) results in an EV of 2.5%. * **Verdict:** You are mathematically correct to prefer Treasuries here. The "Risk Premium" (the extra return you get for taking the risk) is actually **negative** in your scenario (2.5%−3.6%=−1.1%). You aren't being paid to take the risk. # 4. Nuance: The "Big Tech" Firewall The biggest difference between now and 2000 is **Cash Flow**. * In 1999, many leaders were pre-profit. * In 2026, the "Big 7" are essentially sovereign-wealth-sized entities with massive buyback programs. **The Risk:** Even if Big Tech stays profitable, your scenario holds true because of **Multiple Compression**. If the market decides AI is a "bust," Microsoft's P/E ratio could drop from 35x to 15x, even if their earnings stay flat. That is where your −50% scenario lives. # Analysis of Your Positions * **Swiss Francs ($CHF):** A classic "flight to safety" currency. It de-correlates from the USD/Euro-centric tech collapse. * **Gold ETFs (IAU, SGOL):** If the Fed reacts to your "Scenario B" by printing money to save the banking system (again), gold is your hedge against the resulting debasement. * **Hedged Options (QQQ/IWM):** This is the smartest part of your play. By "setting a floor," you change your EV calculation because your Rloss​ is capped (e.g., instead of −50%, it's capped at the cost of the put premiums). # Summary Your scenario is highly plausible. The "AI Winter" usually follows an "AI Summer" not because the tech stops working, but because the **Return on Investment (ROI)** takes longer to manifest than the **Burn Rate** allows.

failedreform

And funding doesn’t seem like it will be withheld any time soon, LPs are trying to figure out to deploy even more capital into VC.

failedreform

Sovereign wealth funds, large family offices, high net worth individuals. 2026 vintages have been record breaking for the size of funds raised. My VC raised a fund 3x their last vintage.

tex1ntux

No, they only buy potential winners. If someone has already won, they don’t need VC money.

ideabankventures

There are so many AI companies that are private, VC funded.

spac420

you do realize, VC is like DeathRowRecords? Everybody gets money with the hopes that 1 outbof 10k will be the next snoop dog.

squarecir

VCs are out of the game already. The type of money getting invested now dwarfs VC AUM.

bungholio99

Wow you wrote that much just to point out something that was always the case…Most startups go bust, most startups are a bust…a uniform is rare and don’t know if I mentioned startups are always broke and at the brink of the end…it’s a startup. Also VC isn’t focused on startups, they are focused on Companys they can take off the stockmarket…

Visual-Currency-234

Your math looks solid but you're missing something - burn rates aren't uniform across companies and VC firms have way more data than we do about which ones are actually close to running out The dot-com comparison is good but AI companies today have actual revenue streams, even if they're not profitable. Back in 2000 you had companies with zero revenue burning millions on Super Bowl ads That said, your point about VCs having insider knowledge and ability to time shorts is pretty scary. They definitely have incentive to coordinate the timing if they know crash is inevitable anyway What's your timeline estimate for when first major AI company runs out of runway? Seems like that would be key variable in your model

SellSideShort

You think VC’s have control over literally anything at all? LMFAOOO dude they are VC’s

johndsmits

A number of start up founders are expecting this.Mind that a lot of these startups used SAFE notes. That means the VC get something back and the employees/founders are bag holders.

GreyFox_1337

Wait, the ai bubble is due to the mag 7 mostly. They don’t need VC. They are actually already making profit. Just spending more. So they won’t go down and bring the stock market with them. What am I missing here?

rocketseeker

The bigger VC companies like Blackstone and the other greek gods had some eventualities in the last weeks, yes? Do you believe this is a trens going forward?

batmund

Ouch to anyone who actually fell for the $25 price. You guys are now the exit liquidity for these companies that want to stay private longer, buy out employees, and avoid the dreadful IPO market right now. They tapped all the dentists (VC funds) and now they found a way to come for your money under the guise you’re getting in on the ground floor. But if a private company is bundled with other private companies and posted publicly as yet another VC funds, showing its value to the world by posting it publicly, it defeats the whole purpose of private investment. If you were smart you would have waited and set a limit order to purchase the stock at $21 to get them cheap. Then sold when it hit over $23 for a quick 10% gain. Now it’s down to $21 so every one of you who paid $25 was out money before it even started and need it to go up 20% just to start profiting. Also be aware you can only sell one single share without penalty. If you sell more than that in under a year you are banned from buying IPOs for I believe 60 days. Always anticipate the scheme and play your cards that way. Try to visualize yourself as a money hungry person trying to trick you, and do the opposite of what they ask you to do if you want any chance of surviving a manipulated market.

samyidak

That’s a VC fund liquidated per their cycle.

aka0007

Your analysis assumes VC's share you assumption that their decisions will crash the market. My understanding of these type of investors is they don't believe any of them has sufficient liquidity to have a material impact on the market, not individually or even collectively. Also, VC's might assume each company is looked at by itself and not as a systematic thing as you suggest. I would also point out that AI is currently being used on the battlefield in Iran... every government is about to throw as much money as they can at AI as they come to understand the force multiplier AI is. AI is enabling near real-time identification of high-value targets that can be taken out by air force. In prior wars, you did not have AI to assist and your air force quickly ran out of high value targets resulting in it mostly being ineffective to wage war by itself.

EcstaticLetterhead76

This!! Also, VC isn’t the only way to raise or generate cash. Companies can push investments out, they can cut HC, they can go public. This person is oversimplifying. It’s cool to call it a bubble

EcstaticLetterhead76

VC won’t pull the plug, companies will go public if they need to or if VCs are unwilling to dish out more. It’s not black or white.

Sober_Alcoholic_

Those companies actually have *profits* on top of their revenues. Hyperscalers and their funders are hemorrhaging money every month despite gradual revenue increases (which on a per megawatt basis are trending the wrong way already). My first dominos to fall are CRWV and/or ORCL for companies. For banks/VC it’s Blue Owl.

LambdaLambo

That’s not how VC funds work. They’re not shorting the market, that’s not their mandate. At worst they’ll return money to LPs, but no one will do that bc they want the management fees.

Tendie_Tube

As a VC do you fold early and short the market, or do you wait a little longer at the risk of someone else crashing the market first?

Tendie_Tube

The trigger event will probably be a non-openly-traded company that the VC ecosystem decides to allow to die.

FinestObligations

I don’t think it’s a binary event, if we at least consider the VCs are at least *somewhat* competent. LLMs are good *at some things*. They are decidedly not good at other things, and the startups using it for the category of things it’s not good at will indeed likely go bust — VC funding or not. As an example all of the ”mobile app generators” will all go the way of the Dodo.

Swimming_Cover_9686

1. is already happening with Nvidia refusing to pump more money into openAi to continue the circle jerk, also GCC companies are the VC's pumping right now and they need the cash themselves right now

banditcleaner2

"The first VC to cut funding to a failing AI startup and short the market wins; expect a race to the exit." Idk about this one. Wouldn't this imply VCs have an interest in doing exactly this if it were so easy? Yet they aren't, or at least haven't yet. Or is the argument that VCs are trying to squeeze a bigger profit from AI startups then they could possibly make by shorting the AI bubble right before they pop it?

Darth1Football

In our industry the VCs are looking at 1 thing and that's sales / market share growth. The normal window they have from start up to fold averaged 3 years with no growth or significant wins. When it becomes apparent there's multiple fails that may accelerate this timetable for VC turning off the cash spiggott

Tendie_Tube

But who keeps supplying the dry powder? The step I didn't explain is how the people who invest in VC firms will be the ones to decide to withhold their funding, thus tying the hands of the VC firm.

failedreform

You are not factoring in VC incentives. Fund sizes are larger than ever and they must deploy dry powder. Even failing businesses are compelling acquisition plays. Many of these businesses are already failing silently and being acquired at a price that makes everyone whole. You are overweighting your bear case.

ThisKarmaLimitSucks

Agree with the VC domino theory, but this time really is different. Post '08, the government turns on the money printer any time liquidity even looks like it may be running short. We'll get to step 1 and step 2 of your theory, and then JPow or his Trump-appointed lackey will start printing.

ai-moderator

#TLDR --- **Ticker:** QQQ / GLD **Direction:** Down (Tech) / Up (Gold) **Prognosis:** Buy Gold & QQQ Puts **Catalyst:** VCs playing Prisoner's Dilemma to see who rug pulls the AI bubble first. **Logic:** The first VC to cut funding to a failing AI startup and short the market wins; expect a race to the exit.

BarneyBloodAxe

Anyone tracking the VCX (Fundrise Innovation Fund) listing on the NYSE this Monday/Tuesday (Mar 9/10)? It’s a rare liquid entry into private tech that usually requires accreditation. Portfolio is solid: Anthropic (21%), Databricks (18%), OpenAI (10%), Anduril (7%), and SpaceX (5%). The Setup: Current NAV is $18.98. With existing investors on a 6-month lockup, the initial float will be very tight. We’ve seen similar listings (like DXYZ) trade at a massive premium to their underlying assets due to the demand for SpaceX/OpenAI exposure. The Fees: Total expense ratio is capped at 3.00%. High for an ETF, but it has no carried interest (profit sharing), which is a major structural advantage over traditional VC funds. Planning to watch the opening cross for a starter position, or waiting for the Day 1 price discovery to settle?

Hacking_the_Gibson

Lol, I was involved in a VC backed company where indeed they didn't care that the thing was burning $1M/month on a $10M raise. 

RicoSuave1962

Solid piece, but the CON guy was way too backwards thinking. Here is a much better “forward thinking” piece. Enjoy ! https://youtu.be/pOihzbIUloA?si=sYYp6VC6PJLQuyq3

dansdansy

Start a tiktok about a day in the life of an investment banker/FAANG dev/VC bro- just skip the first part about having the job in the first place and go straight to the tiktok, profit.

SpyBagholder

Serious question how will this affect the AI spending? I would think a continuous sell off would tighten VC spending and Big Tech spending right?

Gr8WallofChinatown

> There’s probably a monetizable market demand for a “third place” You’re way too late. The VCs have already jumped on board and are killing everything. The non VCs independents can’t compete and are slowly closing doors due to rent increasing Even churches are going through VC model… of course it’s American evangelicals creating church startups which franchise licensing Third places are getting squeezed for every penny. Nature areas like natural parks are getting overwhelmed and overcrowded. Everything’s going to shit

shawman123

if they are going public they will file an S-1 with the details. That said market does not look at companies valuation based on past revenue but on how rosy the future is painted. Otherwise even a company is OpenAI does not deserve its valuations. And of course Tesla. But if you can sell the future sky is limit in this VC fueled valuations for the companies.

PerformanceLeft5162

It's interesting to see how assets that used to be private are gradually reaching everyday investors. Makes you think of how platforms like Fundrise opened up real estate investing, though a VC fund tied to OpenAI and others is on a whole different scale.

Same-Brilliant2014

The US is like a VC and Israel is like the business who's gonna revolutionize toilet paper. Why use your own money when you can use someone else's

Ambitious-Mix-7477

Every VC firms has their own investment thesis where they define what kind of company (product, industry, sector) or location, stage they will invest in, and also ticket size per investment. You can either find it in their website or you can go this page to search for your targeted investment firm [https://www.gatsbie.net/find-referrals/vc](https://www.gatsbie.net/find-referrals/vc)

TheResultOfUs

It's easy to grow your company when you're taking in huge amounts of VC money, but iirc they are unable to turn a profit, and in order *for* them to turn a profit they'd need to increase prices to a very unattractive amount.

n8_mills

Ok? Based on them proposing to support the AI industry with circular funding? AI is not making nearly enough money to justify its existence. Without AI hype, what happens to NVDA? What will those earnings look like? The hyperscalers are all on VC credit right now, they're not operating on revenues. Blue Owl has declined to buy in any further, the rest will soon be following suit. Build out will cease unless businesses can actually start replacing labor with AI, and mostly they can't. Everybody hates AI slop, there's no market for it. It's a solution looking for a problem. But let's talk about the data center builders. How is CoreWeave looking? Bad. The industry has no fundamentals and the only people still hyping it are dark enlightenment techno monarchists and superintelligence accelerationists. It's a cult, just like TSLA or Carvana, but instead of just one stock it's a basket of stocks, and NVDA is floating on top of them all.

Atomic_Hot_Sauce

OpenAI, Anthropic, Perplexity, etc are all holding the cloud hyperscalers hostage at this point. It’s like what Ginko Bioworks did but less conspicuous. Context: Ginko Bioworks created JVs with VC money to exclusively use Ginko’s synthetic bio platform, effectively creating a customer out of thin air and turning VC dollars into revenue that VCs pay for at a higher ratio of 1:1.

TechTuna1200

It's gonna be the issue again. Every salesperson is trained on Salesforce. Now you switch CRM, and you have to retrain everybody again. And not talking about that, if you build a Salesforce competitor and go head-on. Your product is gonna be inferior in everyway. And not speaking of, no VC is gonna fund you to make a Salesforce clone. The code has never been the moat of software companies. If you don't understand that you don't understand software companies.

ratfukabich

SaaS industry is extremely fucked up. It’s never about being good, just less shit than the other guy. Established VC/PE control the broader landscape and easily undercut potential adversaries, either to absorb IP or destroy competition. Nothing rises from the abyss.

KaMaFour

So you know how supply and demand works? Imagine you have a company controlling 95% of supply for a certain product in which supply can't be quickly increased (or decreased) and suddenly everyone desperately needs as much of the product as it is physically possible and everyone has access to unlimited VC money. I'm gonna leave the rest up to your imagination.

PuffyPanda200

But chat gpt told me to short Alphabet. I call it 'vibe investing'. Actually though. AI up an app that basically does vibe investing but is really just a wrapper for grok. Meet with SF VC funds. Get valued at 1 B. Run away with the money. Not a bad plan.

anyportinthestorm333

Fear mongering. The US is spending >12x what china spends on AI and has been for some time. This narrative gets pushed to facilitate graft, like the $52 billion that went semiconductor manufactures and research under the chips act. Tech learned they can just buy elections like so many other corporations/industries and achieve corporate socialism… the PE/VC firms and their ultra wealthy investors want a ROI and banks don’t want the firms to default on leverage/loans. A lot of people making a lot of money on this and will expect Us government to hold the bag and keep the money flowing

anyportinthestorm333

Tech bros have certainly learned how to buy elections. but private equity and VC firms financed these endeavors with leverage from banks. Banks will never be allowed to fail…

vansinne_vansinne

they're also creating the conditions for layoffs by lighting all available VC money on fire

Flimsy-Ad-858

Yeah this is the part that matters. Why is anyone surprised by this post? Altman might as well say they're planning a cash burn of $10T. What are the VC bros gonna do, stop giving him infinite money? That's never gonna happen because they'd have to admit they were wrong.

DJ_TKS

Wait can anyone answer me? Realistically - Microsoft will buy them when VC funding runs out. What’s the move? How to profit off it is the question

fumar

Sure. But they aren't at the whim of VC investments to stay in business because again, the company makes more money than they spend