Putting Friendship to the Test (Or the Proof Is in the Benjamins)

The spectacle of rich people doing ridiculous things has long been a source of amusement. In the 1980s there was “Lifestyles of the Rich and Famous.” Then some genius realized that you didn’t need to be famous to act crazy — only rich. A few years ago, the fictional “Silicon Valley” series portrayed the wild and wooly lifestyles of the rich and techie. But the reality just seems to get crazier and crazier.

Carey Smith | Founding Contrarian

So many “business articles” actually belong in the entertainment section because of the laughs they provide. It’s too bad that the impression they give of business is usually so wrong, and that makes them potentially dangerous. One of the latest to fall in that category is a Bloomberg piece on the phenomenon of friends investing in friends’ startups in “certain elevated strata” of Silicon Valley.

“Investing in my friends is super cool,” one person in the article is quoted as saying. “I get to support them. If they do well, I do well. If not, I’m helping them be entrepreneurs.”

You call that “help”? Sounds like the nouveau tech-riche in this stratum of the Valley have been ingesting a little too much ayahuasca in the Marin Hills.

If the article is to be believed, which it shouldn’t, being invited to a fundraising round — or not — as well as choosing to invest or not have become indications of a friendship’s strength. This is just every kind of crazy. And certainly not “helpful,” as I understand the meaning of the word.

Not only does it encourage the idea that friendship is a valid substitute for due diligence, it also depicts the investing world as an extension of junior high school — cliquish, popularity-driven and given to partying, when, in fact, real investing involves extensive research beforehand, guidance throughout, legwork, and far more money than the measly amounts mentioned in the article.

And very often, it requires telling someone their idea is not worth pursuing. Yet in the “elevated strata” the author describes, that scenario never seems to come up. Instead, if you hesitate when asked to invest — if the friendship isn’t worth funding, in other words — it’s a clear sign this BFF is not worth keeping. Time to return that “bestie” bracelet and move on!

Ever since the Internet with its unlimited newshole turned almost every legitimate news source into a click-chaser, there seems to be no end to articles like this. But in this case, at least, the whole damn article is so crazy that I felt compelled to share it. Hope you get as much entertainment from it as we did.