The case for a 6-month moratorium on VCs tweeting
Venture Capital's track record in 2023 is pretty abysmal so far, and it has nothing to do with investments in startups.
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The woeful performance has been in the credibility of VCs.
In March, VCs helped trigger a bank run that destroyed Silicon Valley Bank, the lender that has been integral to the startup economy for decades and which was itself the bank of choice for more than 1,000 VC firms.
And this past week we witnessed VCs grab the pitchforks in a protest against crime and lawlessness in San Francisco after the tragic, fatal stabbing of Cash App creator Bob Lee in the streets. San Francisco's "criminal-loving city council" that enabled the killer "have Bob’s literal blood on their hands," tweeted Matt Ocko, a partner at DCVC. David Sacks, a cofounder of VC firm Craft, said he would "bet dollars to dimes," that the crime was similar to a stabbing in Los Angeles that involved a "psychotic homeless person."
The only problem, as we know now, is that Lee wasn't a victim of random street crime or an attack by a homeless person. According to the police, he was killed by another tech entrepreneur as a result of some dispute.
VCs are in the business of making bets, it's sort of their raison d'être. When a VC bets dollars to dimes, people listen because they represent the "smart money," the elite class of investors who have brilliant insights and can spot unique, against-the-grain ideas.
Just look at the lofty principles espoused on some of the leading VC firm websites:
"The most contrarian thing to do is think independently," crows one well-known firm's website. Another site associates itself with "The outsiders. The defiant. The independent thinkers."
If the first four months of 2023 are any indication, however, VCs have shown that they are all too human, perhaps even more vulnerable to panic and groupthink than some humans.
I'm generalizing of course. Not all VCs joined in the Bob Lee freakout. Garry Tan, the CEO of Y Combinator, who has been a leading voice in criticizing San Francisco's homeless problem and its policing, was admirably restrained when news of Lee's death emerged, tweeting that with so little known about the circumstances, it was too early to speculate about what happened.
And of course, the quick leap to conclusions about Lee's death wasn't limited to VCs — tech entrepreneurs, startup founders, and executives joined in the pile on too. Elon Musk famously fulminated about the horrific violent crime in San Francisco and the attackers who get set free.
San Francisco has plenty of problems, and is grappling with the same challenges, including homelessness and property crimes, that many big cities face these days. No one thinks the status quo is acceptable, but hyperbole and paranoia won't help.
After all the discussion lately about A.I. "hallucinations," the events of recent months are a reminder that we humans still have many bugs. Maybe we need a 6-month moratorium on VCs tweeting?
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Alexei Oreskovic
Data Sheet’s daily news section was written and curated by Andrea Guzman.
This story was originally featured on Fortune.com
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