This is spot on. The Sequoia letter makes the correct point that FTX accounted for something like <1% of the fund vehicles used to invest in FTX. Most startups fail and while the manner matters—I’m sure they are having some tough LP conversations—this does not remotely represent an existential risk to their business. This will be forgotten in due time.
EA had unique insight into SBF the person outside of FTX pitch meetings. As others mentioned, EA also had a view from the Alameda breakup. I have no idea if that information would/could have been helpful, it is meaningfully distinct from the information VCs had (although, lol at not getting the balance sheet for an investment in a financial services company…).
One more point: the reputational damage to EA here is going to be orders of magnitude worse than for their investors. How have potential donors/employees/partners changed their view on Insight Venture Partners as a result of FTX? No one cares. Has this meaningfully hurt EA’s public reputation? Undoubtedly especially given recent fanfare around WWOTF. I am worried about this and am not sure what to do about it.
This is spot on. The Sequoia letter makes the correct point that FTX accounted for something like <1% of the fund vehicles used to invest in FTX. Most startups fail and while the manner matters—I’m sure they are having some tough LP conversations—this does not remotely represent an existential risk to their business. This will be forgotten in due time.
EA had unique insight into SBF the person outside of FTX pitch meetings. As others mentioned, EA also had a view from the Alameda breakup. I have no idea if that information would/could have been helpful, it is meaningfully distinct from the information VCs had (although, lol at not getting the balance sheet for an investment in a financial services company…).
One more point: the reputational damage to EA here is going to be orders of magnitude worse than for their investors. How have potential donors/employees/partners changed their view on Insight Venture Partners as a result of FTX? No one cares. Has this meaningfully hurt EA’s public reputation? Undoubtedly especially given recent fanfare around WWOTF. I am worried about this and am not sure what to do about it.