For the brand, I guess

What are we doing here?

The ascendent aesthetic.

If you run a big venture capital firm, how do you decide who to hire?

The obvious answer is that you are in the company-picking business, so you want to hire people who are good at picking. Every year, thousands of small startups will email you asking you for money. They will all tell you that they have a revolutionary new idea; they will all send you a tidy deck that explains why the problem they’re solving is huge, why they have a novel solution, and why now is the moment for you to invest in them. But of course, most of these startups will be wrong: They won’t become big companies, and if you give them your money, they won’t be able to pay you back. You will lose money—sad!—your limited partners will stop giving you money to invest in other startups—bad!—and you will not get included on any fancy lists in Forbes—embarrassing! If you invest in the right companies, however, they will grow from plucky dorm room dreams into vast international conglomerates worth many billions of dollars. Your venture capital firm will stay in business—good!—you will become very rich—fun!—and you will get to start a podcast—the dream!

So, hire the best pickers. Hire the experienced industry veterans, who’ve worked with hundreds of startups and evaluated thousands of fundraising pitches and can see success in a founder’s eyes. Hire the data wunderkinds, who can extrapolate a few months of business metrics into a billion dollar exit. Hire the people who can predict the future.

But no, that’s not quite right. Because if you are a prominent venture capital firm, you don’t just need to be good at picking; you also need to be good at being picked. Though some startups rise from obscure rags to generational riches, many of the successful ones are obviously good. Their revenue chart is a vertical line; their founders are tech celebrities; their cap table is full of other blue chip investors; they have all three things at once. To invest in these startups, you have to convince them to take your money over the money of dozens of other investors who also want in on the deal.

In other words, clever investors have to find the deal and win it; popular investors can partially outsource the picking, and focus more on the winning.

How do venture capital firms win? There are some options:

1. Offer startups lots of money. This is the most straightforward way: If one venture capitalist offers a startup $10 million for ten percent of their company, offer them $20 million, or $30 million, or $50 million, for the same ten percent.
   
   But this can quickly turn into a dangerous arms race, as it did, rather famously, for Tiger Global in 2020 and 2021. At first, it worked spectacularly—they won lots of deals—and then, failed spectacularly—they lost lots of money, their limited partners stopped giving them more, and they dropped at least 83 spots in the Venture Capital Power Rankings.¹ Very bad for business, though they probably could make a great podcast.
   

2. Promise to be very chill. The formal way to do this is to give startups money with few strings attached. Don’t ask for protections that ensure you get paid back first; don’t ask for special voting rights that let you dictate big strategic decisions. There are practical limits to this though, because popular startups will typically get offered standard terms from prospective investors, and there aren’t many ways to make these terms any more relaxed.²
   
   You can also promise to be very chill in informal ways. Talk about how founder-friendly you are. Don’t yell in board meetings. Don’t be a regular mom; be a cool mom. But this also only goes so far, and “there are no rules in this house” only has so much appeal.
   

3. Promise to be very helpful. Hire expensive headhunters and PR experts, and offer their time to your portfolio companies. Convene “executive roundtables” at fancy restaurants so that your founders can meet people at Capital One Lab.³ Talk about how you want to be their sounding board, their first phone call when something goes wrong, their emergency contact.
   
   But egomaniacal founders don’t want the help, and experienced founders know that the help is oversold. Huge operational support teams are another expensive arms race that is neither all that differentiated—most big VC firms have big professional networks—nor that useful—there’s a reason that “let me know how can I be helpful” is a punchline.
   

4. Talk up your reputation? Your brand? Your, like, vibe?
   
   On one hand, this is dumb; when startups choose an investor, tens of millions of dollars are at stake; a sprawling network of new connections is at stake; the constitution of their company is at stake. A VC’s brand isn’t how you make this decision; it’s the punchline to another joke.
   
   On the other hand, no, of course this is how founders make these decisions. We all chase status, and brand is prestige. Boston College can throw all the scholarship money and campus amenities they want at students, but the thing they can never offer is Harvard’s name. The same is true for venture capital firms: Reputation is the one thing that can’t be bought.⁴

Or at least, it couldn’t. For a long time, investors, like colleges and big corporations, forged their brands on long histories of reliable results. They created esteemed legacies around venerable pillars like Loyalty, Determination, and Independence. This was hard and careful work, built in drops and lost in buckets.

Simpler times, I guess. Now, reputations are created by poasting. They are created by going direct and being based, with dunks and dank memes. Celebrity and cultural cachet is no longer built brick by slowly-laid brick, but launched, by going viral on Joe Rogan. And it’s yet another arms race—if everyone is vying for algorithmic attention, the “best” brands are the loudest, and the ones most committed to their bit.

And so, the New York Times reports:

Daniel Penny, a Marine veteran acquitted on a charge of criminally negligent homicide in Manhattan in December, has been hired by one of Silicon Valley’s most prestigious venture capital firms to join its “American Dynamism” team.

Mr. Penny, a Long Island native and former architecture student, will work in a group that supports American interests, including the aerospace, defense and manufacturing sectors, according to the website of the company, Andreessen Horowitz.

Mr. Penny was charged in 2023 by the Manhattan district attorney’s office with manslaughter and criminally negligent homicide after a video of him fatally choking another passenger, Jordan Neely, on the subway circulated online that May.

“We believe in Daniel and are excited to have him as part of our team,” David Ulevitch, a partner at the firm, wrote in a memo to employees on Tuesday that was relayed to The New York Times.

Mr. Ulevitch said in the memo that the firm plans to teach Mr. Penny “the business of investing” and that he will support several of the firm’s portfolio companies. On Andreessen Horowitz’s website, Mr. Penny is listed as a “deal partner.”⁵

I recently heard that another prominent VC firm tolerates a very controversial partner because they have valuable connections in valuable markets. It’s not that the firm supports his politics or his online personality, but they simply don’t care. The returns outweigh the reputational damage, and the ethics of the thing are immaterial. His employment is a business decision.

Penny is, I suppose, a different character from the same story. It’s unlikely that he has a traditionally useful Rolodex, but he is, to some, a trophy in the culture war. Putting him on the payroll proves Andreessen Horowitz’s political bona fides: That they are aligned, boldly aligned, with the increasingly emergent aesthetic of masculinity, meritocracy,⁶ and Elon Musk—which is an aesthetic that is especially fashionable along the booming frontiers of AI, crypto, and the various Elon Musk sci-fi adjacencies. Though that brand—and Penny, to say the least—has plenty of other, uh, “problematic” associations, no matter: The ethics of the thing are immaterial.⁷ He was hired for the vibe—and today, vibes are business decisions.

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But all this can probably be extrapolated one step further, through one more twist in the arcing evolution of venture capital.

Consider David Perell. The self-described “Writing Guy” has nearly half a million followers on Twitter, hosts a podcast that’s booked some impressive guests, and used to run an online writing course called Write of Passage.

But one thing Perell doesn’t seem to do very much of is write. As best I can tell, he’s written two posts for his blog over the last year. Perell’s brand is definitely writing, and his career is kind of writing, but his work is not writing. Writing is a means to famous ends.⁸

Perell’s course said this explicitly: “When you publish your ideas online, you unleash the full power of the Internet…Writing online will unlock opportunities and build your future.” On one page about the course, he shows graphs of former students’ growing follower counts, with annotations for when they took the course.

This, though, is the world we live in now. Being an internet celebrity is the ultimate ambition. You don’t monetize attention; popularity and fame are what you buy.

And so it’s becoming with venture capital. What Silicon Valley is doing here is no longer a quiet game of money allocation; it is also about having fans. The business model is inverted—the media company and popular podcasts aren’t about deal flow; they are the point. The audience is the point; the likes and digital hugs are the point; the tweets from JD Vance are the point.

If you run a big venture capital firm, how do you decide who to hire? Whoever gets you attention. Whoever inspires more tweets and Substack posts. Whoever is provocative, and gets the people going. All press is good press, it seems, because even capitalists—from financiers to founders—have more base desires and addictions than money.

1. Though it could work now? Tiger overpaid for deals in 2021, when startups were already grossly overvalued (though that’s not entirely exogenous; they were overvalued in part because of firms like Tiger). It seems like a somewhat open question Tiger’s approach would work in more normal times.

2. But there are some! Tiger tried that too—for example, they offered term sheets after doing minimal diligence, and took no board seats. It was very chill, very effective, and, ultimately, very expensive.

3. They’re not a regular enterprise; they’re a cool enterprise.

4. Celebrities figured this out a long time ago. Nobody wants Kevin Durant’s introductions to Walmart’s IT team; everyone wants to hang out with Kevin Durant.

5. Full disclosure: I have a loose professional relationship with Andreessen Horowitz through their scout program, through which I’ve made five investments in three years.

6. In this context, lol.

7. Or, you know, they are material in the other direction, and point is to stick it to the libs. This is pretty in vogue these days too.

8. In fairness, when Perell shut down his writing course, he said he’s “eager to double-down on [his writing podcast] and prioritize my own writing again. And who knows? Maybe it’s time to write a book.”