Why a Traditional VC Model Doesn't Align with the Bitcoin Standard?

A Thread:

Time Preference: In the VC world, there's a high time preference to deploy capital due to the typical deployment period. This urgency can sometimes lead to hasty decisions, not always aligning with the long-term value proposition of Bitcoin.

Illiquid Equity Risks: Investing in illiquid equity presents challenges. There's the risk of dilution, which can erode shareholder value. Additionally, liquidity events can be unpredictable, making exit strategies complex in a Bitcoin-centric ecosystem.

Fiat's Counterparty and Debasement Risk: In traditional VC, fiat often serves as the primary liquid position. However, its inherent counterparty risk (e.g., SVB) and debasement risk from central bank actions highlight its vulnerabilities in the current financial landscape.

While the VC model has its merits, adapting it to the Bitcoin Standard requires a reevaluation of strategies.

The solution is simple: prioritizing Bitcoin allocation can truly harness the potential real return for LP investors without facing the problems identified above.

The Bitcoin Standard's author, @saifedean, sums it up elegantly, “Sound money allows people to think about the long term and to save and invest more for the future. Saving and investing for the long run are the key to capital accumulation and the advance of human civilization.”