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by capableweb 1148 days ago
> How is that far fetched? There are plenty of recent examples where investors didn’t do enough due diligence in projects seeking huge valuations.

Is there examples of investors investing in a project without even visiting the homepage of the project or trying to understand even 0.1% of what the project is about? I don't think it's super common, but maybe I'm not hanging around the right/wrong circles in SV.

> And why are you putting leaked pitch deck in quotes?

AFAIK, this is the only article that mentions a leaked pitch deck from Stability AI and it only includes one image, which puts into question if there really is a leaked pitch deck, or if it's just one image that got sent to them.
2 comments
jacquesm 1148 days ago
FOMO really is a thing. Mind you, this isn't all investors, but as a company you only need to find one that will sign. And that one might serve as validation to a bunch of others who might then want to be in on the round. It can get pretty crazy. At the same time, plenty of solid businesses that aren't hyped can't raise a round at any reasonable valuation. It really isn't a fair world.

The worst is when your solid business suddenly gets a competitor flush with capital which decides to start a price war, which, depending on the amount of capital they've got they may well win before they themselves go out of business.

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szundi 1148 days ago
Yes it happens all the time. Check out the FTX story and many others
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capableweb 1148 days ago
The comparison would be if investors now suddenly say "Hey, we didn't know FTX were trading with cryptocurrencies, we don't like that!", not that things were hidden behind financials and corporate setups.

Even though the troubles of FTX were hidden behind financials, someone who would look deeper into it would spot issues for sure. But maybe not from a brief look, while in this case with Stability AI, no one didn't even do a brief look?

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z3c0 1148 days ago
I'm not sure how one could equate a lack of DD to deliberately misleading investors.
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jacquesm 1148 days ago
That line can be pretty fine. Not in the case of FTX but the perfect poison for any investor is a founder or a group of founders that are true believers but that are mistaken all the same. They don't actually know that they are misleading investors, it isn't deliberate but if it was you wouldn't be able to spot the difference.
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