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9) Ok, well, so, what's the *full* flow of funds here? Well... a) VCs invest in Meta b) VCs invest in $ X company P c) P sends $ X to Meta for advertising d) Customer S buys services from P, paying back $ X/2 e) P raises $ X/2 more from VCs f) Go back to step (c)

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10) You might think that Meta, and Google, are making their money from customers, or from companies. And to some extent that's true!

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11) But to some extent they're making money from VCs, because here's the *net* flow of funds: i) VCs: - $ X/2, + stock ii) Customers: - $ X/2, + some pizza iii) Companies: - stock, create pizza iv) Meta: + $ X

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12) In other words: --Customers buy cheap pizza from companies --VCs send money to Meta --VCs get equity in companies

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13) And what exactly do the companies get out of this? Well, one of the following, really: a) marketshare: future profit (???) b) founders get to sell out in secondaries c) you get to be 'a part of the future'

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14) But it gets even weirder. Because who is Meta, exactly? Well, Zuckerberg, to some extent. But mostly, it's similar shareholders to the companies investing in it.

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15) And so the flow of funds is, to some extent, really a cycle of funds.

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16) But how about VCs that *don't* get large dividends from Meta and Google?

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17) And who exactly are the ultimate investors? They're people, investing in stocks. Also, they're college endowments, and pension funds.

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18) When deployed correctly, modern finance can be breathtaking: seamlessly providing financing to innovative ideas, with the sharpest investors getting paid back a lot in the long term. When deployed recklessly, it can be breathtaking, I guess, just in a different way.

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19) That's kind of how modern finance works. It's also, for what it's worth, similar to how postmodern finance works:

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1) Between inflation and recession: Post-Modern Monetary Theory

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10:26 AM · Aug 14, 2022Twitter Web App

carlini8.pcc.eth

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Looks a lot like the CeFi collapse of late. If one pillar (UST) capitulates it could get wild.

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Have to wait and read this during toilet time, tl;dr

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Nice thread Sir. Send it! $KAS kaspanet.org

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rule 1: everything is a ponzi. usa ban abortions. need more participant

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Isn’t FTX VC backed?

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To sum up, modern finance is a looong term scam that is "backed" by a gov which is supported by the rich group (whale/community).

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Seems like you just discovered fiat is a greater fool ponzi and bitcoin is actual real hard money no one can print more of to keep inflating away kicking the can down the road

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Now do FTX and Alameda.

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i request you make no such thread anymore for the sake of our industry and our business

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Maya Parody Parody

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fair, but then why did FTX choose to recreate that exact model in L1 ecosystem funds?

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Bubble investments inc.

@bubblementality

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and

Because it works? Bags get pumped etc

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