The Stonewalling of the Unintroduced White paper
The Venture Capitalisation of the Cryptosphere
Prelude and grumble
I must start, as one unfortunately should when writing about inequities and inequalities in our society, with a statement that yes, I am not from a deprived background, nor am I from an elite background. I am purely observing & when I use the words “them”, this is because I do not want to make stereotypes of any group, class and what have you, it is not because I see them as seperate or different to the rest of “us”.
What does it say about us as humans that the immediate reaction to talking about or trying to fix inequality is, “well you can’t speak for them”, “you’re saying all of this from a priviliged position”, “what makes you think you know what they want?”. The immediate reaction to raising a problem with society isn’t to fix the problem, it is to attack the person raising the issue as to why they aren’t qualified to do so. I see this all the time with corporations saying, if they wanted a union they would make one, as if they wouldn’t immediately ostracise any leader or snuff it out as soon as they see any sort of organisation forming. Anyway….. the reason for the article is to give my experience of private equity culture and how I see it now taking the same form in the world of blockchain & crypto.
The obsession with education, signet rings & incestuous social groups
My first realisation of class & family privilige in the workplace was at my first stockbroker role in London. There wasn’t a salary in this role, it was purely commission only, I must have seen a 500–1000 staff turnover in my few years there with a maximum desk capacity of 50–100. I would say the average tenure of junior brokers on my team was 6 weeks. I began to notice that there were two ways people stuck around;
- They were a good salesman and were able to support themselves on a commision only salary, this was maybe 1 in 100.
- They came from money and saw this job as experience for their next role so stuck around being supported by their family to notch up the C.V.
The unfortunate thing about this was that those from priviliged backgrounds who had been there for a year and made nothing, would then tell the new joiners of their experience, scaring those who may have had more talent than them, but less money, away from the role. These kids from rich families would openly type up their CVs in front of the whole office, asking each other for advice whilst those who had this job as make or break and had to take geniune risk would hammer the phones cold calling all day.
I sincerely hoped that this was down to just the commision only role, and as I progressed through finance these niggles I had would go away into a lush utopia of salaried workers doing the same work and having the same opportunities as each other. Needless to say, that was a fairytale.
I am skipping through my experience as a partner at St James’s Place Wealth Management, as I found again, even though it was a FTSE 100 company, we were self employed and so the same problems were present. However I must say, the fact that you needed qualified exams seemed to scare off those who just wanted their CVs to look a little more polished. Which brings me to my first experience in a venture capital firm.
Before I go into the elitism which has crept its way into the crypto market, I must say of my previous employer that although private equity & venture capital has it’s problems, they are certainly a shining light and a beacon of hope, commited to diversity, equality & the environment. The only remaining area needed to be worked on is social background employment in the investment team, although even in this area they were ahead of their peers.
The Venture Capitalisation of the Cryptosphere
As I walked through the office for the first time on October the 3rd 2017 I thought it was a bit early for Christmas decorations, until I noticed it was just the glinting of signet rings reflecting to my left. The office was curiously split down the middle, with the investment team to the left as you walked in, and the administration, compliance & accountants to the right with sales at the very top. I walked into the “Green Room” (break room) for the first time and saw the new recruits being quizzed on which school they went to.
This was very odd to me. I don’t think anybody from a state school, unless they know somebody is from their area, has ever asked me where I went to school. I guess because it has never mattered to me or to others. If you answered the question correctly and were educated “properly” as a child, it seemed that you instantly found out you had mutual friends, had played each other at Cricket or Rugby or were a long distant relative.
An investment manager in private equity does somewhat manage investments, once they are over the line, but their main role is to source and find these investments. So who better to employ than all of these privately educated, old money, billowy haired signet ring wearing socialites who could list you every private school in the country in order of cost per term?
Just like in private equity, the cryptocurrency space has turned into an incestuous pool of introductions from VC to VC, nobody answers an email unless it is somebody they know, CCing a new party into an email, by way of introduction.
Like all industries, social and class disparity leaks talent like a sieve. Isn’t it strange how the England football teams top talent don’t just come from middle or upper class families?! We say “Well you can’t apply that to this”, “That is physical not mental prowess” but at the same time we call Kevin De Bruyne & Jack Grealish geniuses for their vision of spotting opportunities that the average footballer doesn’t see coming. Even the billionaires in our society have more diversity than the average VC, even if they forget their roots at the first taste of Foie Gras.
Natural talent in any form, is equally spread throughout society. Whether that be financial, physical or academic. Venture Capitalists have got lazy, they rely on introductions because they cannot be arsed to read a White Paper and do some research themselves. They rely on introductions, as it gives them a scape goat, they can’t be blamed if they aren’t the one who has found the talent.
My message to VCs, open your eyes and your inbox, it doesn’t take a genius to figure out if an idea is shit or not so stop being lazy and do some work.