[michaelochurch]

Venture capital does a great job when it comes to the VCs' real objective function, which is to maximize for their own careers and those of their buddies. It's a mediocre investment vehicle, but it's a great gig for a 21st-century job seller. Instead of selling off prestigious civil and foreign service jobs, they're selling executive positions in fast-growing companies.

Chasing "unicorns" doesn't actually work out well because the failure rate is so high, but if you're optimizing for your own career, it makes sense because it creates an aura of social access to "have been in on" a brand-name company, and because people will cling to you in the hope of getting thrown an executive appointment.

[SamReidHughes]

> Instead of selling off prestigious civil and foreign service jobs, they're selling executive positions in fast-growing companies.

If what you're saying has any connection to actual reality, how much do these executive positions cost?

[michaelochurch]

They don't sell them in an explicit jobs-for-cash trade, so much as they use them to curry favor with counter parties. It's about information and favorable future action (e.g. I'll make your kid VP/Eng if you agree to make your employer buy us at $2B no matter what.)

[tptacek]

"I'll make your kid VP/Engineering if you agree to make your employer buy as at $2B" does not sound like something that has ever happened. Has it?

[michaelochurch]

I don't know that it's ever been put so explicitly, but I have seen startups and ex-startups give out very highly compensated positions (over $300k) to people who were spouses, proteges, and children of people on purchasing boards at other companies.

Usually the explicit quid pro quo isn't needed because self-interest is enough to keep the parties in step. In that example, once the kid is given the job, the guy on the purchasing board has an obvious desire to buy at as high a price as possible, since it's not his money.

These are the sorts of issues that would be considered conflicts of interest, and require the decision-makers to recuse themselves, anywhere but Silicon Valley.

[tptacek]

Can you clarify this by citing a specific example where a board member or executive of a privately-held company recused themselves from a recruiting decision because of a conflict of interest concern?

Could you describe more fully a case where a nepotistic hire was made at a company you have first- or second-hand knowledge of where the impetus for that hire was an outside investor? I have for-sure seen crappy and nepotistic hires at startups. That's a banal observation. What I haven't seen is quid-pro-quo.

Further: your claim wasn't simply that there are nepotistic hires (again, of course there are; banal claim) --- it's that the quid-pro-quo for those hires was commitments to subsequent mergers/acquisitions activities. That is an extraordinary claim and one I think you're unlikely to be able to back up, but, I mean, prove me wrong.

[SamReidHughes]

> I don't know that it's ever been put so explicitly, but I have seen startups and ex-startups give out very highly compensated positions (over $300k) to people who were spouses, proteges, and children of people on purchasing boards at other companies.

But I thought it was VC's that were funneling money and prestige to their children.

[SamReidHughes]

What are some examples of this? Or more generally, why do you believe this happens?

[foobarqux]

I don't think job placement is a primary motivator for a VC. Instead, it's a prestigious, well-paid, low-risk (for the VC) position, and on top of that you own a lot of high-volatility, and therefore valuable, options in the form of carried interest, for free.