Venture capitalism frequently amounts to a concealed form of rent-seeking. Bootstrapping is difficult because of early bottlenecks that require capital to be overcome; VCs provide that capital, but frequently onboard perverse incentives like quarterly growth and vested dumping.
https://twitter.com/awrigh01/status/1458614944409264128
The solution to the problem of bootstrapping is already here: it's token effects. We just haven't properly conceptualised it. With the incentive to use projects early in order to receive airdrops, and with the capacity of airdrops to provide a vital influx of capital early in the
project's life, VCs are simply no longer needed. The best amongst them will survive, like a16z, because they provide things other than capital (mentorship) without the perverse incentives, but the industry at large will be forced to consolidate. As they should.
Providing only capital, while adding negative externalities such as incentives, is only one step above pure rent-seeking. It amounts to a tariff that we cannot abide. Let this be our motto: rent-seeking, whether blatant or concealed, will not prevail. The VCs should be afraid.
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