The current crop of VCs fancy themselves masters of the universe. They speak in a Substack fermented patois of CACs and LTVs, hockey stick growth and

@Westenberg | Macro-Morons with Micro-Visions: The VC Disaster Tour

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2024-07-18 07:00:03

The current crop of VCs fancy themselves masters of the universe. They speak in a Substack fermented patois of CACs and LTVs, hockey stick growth and 10x returns. But far too many of these self-proclaimed startup wizards have only the faintest grasp on macroeconomic concepts.

They can build a discounted cash flow model in their sleep and recite the latest SaaS revenue multiples at the drop of a hat. But ask them about the drivers of inflation, or the implications of a steepening yield curve, and you’ll be met with a blank stare.

Youʼd be hard pressed to find VCs capable of correctly defining nominal GD-Fucking-P — a basic macroeconomic indicator.

This knowledge gap might be forgivable if VCs confined themselves to the minutiae of product roadmaps and go-to-market strategies.

But increasingly, the VC class holds outsized sway over the allocation of capital and talent in our economy. The startups they anoint with their capital go on to shape entire industries, from transportation to healthcare to education.