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🌲 Stanford's reign on venture capital is ending
✨How rolling funds are upending the venture industry, 💀Why SF really dead, and 😂Oracle is buying TikTok
Yo! ✌️ I’m Brett! I am a founder and former Cognitive Science researcher. Social Studies is a semi-weekly newsletter for people building great products for humans. It includes recaps of what happened on Tech Twitter every week plus deep analysis using frameworks from Psychology, Economics, and the other Social Sciences.
The biggest story was about how rolling funds are shifting the venture landscape
👴 How to become a VC, the old way - go to Stanford - 40% of VCs went to Harvard or Stanford. That’s it. That’s the tweet.
💰Rolling funds are eating venture - Now (almost) anyone can raise a fund, bring on investors, and deploy capital thanks to Angellist’s new rolling funds.
🎥 How to become a VC, the new way - become a celebrity - This will drive so much competition in venture that the only investors to survive will be those commanding large audiences and those that provide a truly value-add service.
🤔 Where does this leave Stanford? - Prestigious universities will always be breeding grounds for incredible talent, but attending one will no longer hold the weight it used to.
And speaking of change…
💀 SF is ded. D. E. D. - As skies turned bright orange this past week, many more are predicting doomsday for SF as the tech hub of the future. And they’re not wrong.
😂Oracle is buying TikTok - yep.
👴 How to become a VC, the old way - go to Stanford
Venture capital has been one of the most sought after carer paths but breaking into it is incredibly challenging. That said, there is one formula that has worked over the years: go to Sanford GSB or Harvard Business School and maybe spend some time at a big tech company.
To be fair, Stanford and Harvard are incredible breeding grounds for some of the brightest people. But this formula has become so predictable that the venture capital industry has become somewhat of a caricature of itself. Sequoia Capital added 4 new partners in Februrary and all of them went to Stanford.
As the importance of diversity reaches the industry zeitgeist, this formula has been an increasing point of concern.
Even comparable schools like Berkeley are dramatically underrepresented in venture.
Why has this been the case? Ask Tech Twitter this question like I did and you get a lot of passionate answers, some cynical and some realistic:
Like attracts like. People hire people who are similar to them.
Stanford is literally next to Sand Hill Road. Harvard is next to the biotech investing hub.
Generational wealth. H & S grads come from wealthier families.
Highest bar for entry, stronger programs, etc.
Times are changing though. Venture has been getting more and more competitive over the years and the introduction of rolling funds has dramatically shifted the balance further.
💰Rolling funds are eating venture
Dickie Bush has a great thread explaining rolling funds:
Simple enough right? The implications are massive.
🎥 How to become a VC, the new way - become a celebrity
The future of venture lies in the hands of influencers and true value-add investors.
We’re seeing tons of examples of this popping up already. In a few short weeks, Anthony Pompliano raised one of the largest seed funds in venture from his following.
This leads us to one really interesting conclusion:
🤔 Where does this leave Stanford?
Stanford will still attract some of the best and brightest minds for a long time. And smart people will always find a way to win in any market.
That said, the game is changing. Mere connections and prestigious degrees are no longer sufficient for winning deals.
Over the next five years, I believe we’ll see venture capital start getting eaten away (starting with seed) by influencers like Anthony Pompliano and systematized value-add investors like Pipe.
💀 SF is ded. D. E. D.
The “Why I’m leaving SF” essays have been so commonplace over the years that they’ve become somewhat of a meme. That said, over the last month, it feels like everyone is writing them.
There are plenty of great reasons to leave SF these days
Homeless encampments slowly taking over the city
Absurd real estate market prevents even the nations most wealthy from buying homes
Remote work opportunities now bountiful
… Oh, also the unbreathable apocalyptic atmosphere that may be a permanent thing every summer thanks to climate change.
The end of the physical Silicon Valley is nigh.
It may sound preposterous, but it’s actually happening:
😂 Oracle is officially buying TikTok
But they won’t get the famous TikTok algorithm as part of it. So…
💉 Dopamine Hits
📚 Long Reads
Have a great week!