Srinivasan: VCs are financially incentivized to make founders wealthier than themselves
Balaji Srinivasan · 20VC: a16z's Balaji Srinivasan on Why There Is A Financial Incentive For Truth In VC & Why The Best VCs Invest In Founder To Make Them Richer Than Themselves · Nov 25, 2016 · at 29:05
Balaji Srinivasan, partner at Andreessen Horowitz, uses Peter Thiel's early investment in Mark Zuckerberg to illustrate how VC aligns incentives around positive-sum wealth creation.
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“VC is incentivized to build people up. You know, what I mean by that is as an investor, you want to invest in somebody and make them richer than yourself. Example, Peter Thiel investing in the young Mark Zuckerberg put 500,000 dollars into Zuckerberg. Thiel made, you know, hundreds of millions, maybe billions on that investment. But obviously Zuckerberg did even better. And so it's a very unusual elite in the sense that VC is incentivized to make people richer than them. To build people up, right?”
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