[fireeyed]

Why does this amaze you ? More than half of Startups are Ponzi schemes played over a longer time horizon and more artfully. They start with a product or service that barely generate profit in the real world, polish it up with Pitch Decks, sell the idea to investors who then sell the idea to other investors and on and on the scheme goes until they IPO it if it goes that far. The banks get ahead of it and eventually the retail investor and 401k are usually left holding the bag.

[fractionalhare]

That's not a Ponzi scheme, and you diminish the fraud of real Ponzi schemes by equating them with a frothy venture capital market. Very few startups deliberately commit fraud by paying out old investors with new investors. Just because seed and Series A round investors can liquidate earlier doesn't mean it's a fraudulent operation.

[stealthy123]

Former fraudster here. It's a stealth ponzi scheme. An advanced ponzi scheme should not look like what it was centuries ago. A ponzi scheme can be polymorphic and stealth.

It's like saying you are not a human because you're not white. Ponzi can have same structure and look legit perhaps play longer.

Edit: Wow my texts are flagged. Strange!!

[fractionalhare]

I don't really care if you're a former fraudster or not. I am still outright rejecting the claim that the venture capital industry is engaged in, or equivalent to, a systematic Ponzi scheme. If you want to critique it, fine, but don't commit an abuse of terminology.

At this point I've worked for, worked with or invested in over 50 different VC-backed startups. I have been brought in to see their code and the internals of their products. Yeah sure some opportunistic sociopaths like to raise stupid seed rounds on a fugazzi pitch deck. And the industry is frothy with fundraising. But you can't categorically classify the industry as fraudulent.

There exist many varieties of high risk investments with a long time horizon which are not fraudulent. Everyone knows what they're getting into. Cases like Theranos are not the norm, which is why they received outsized attention when they're uncovered.

[hinkley]

The only legal difference between an MLM and a Ponzi scheme is that the MLM has a product. It might be closer to the truth to say startups bear a large resemblance to MLMs.

There are a lot of anti-MLM people who think they should just be called Ponzi schemes. I'm on the fence about the terminology, but I think both should be illegal at any rate.