Welcome to the second edition of VCs Tweeting Badly, a semi-regular look at the terrible ideas of rich people.
Today the world of venture capitalists is all of atwitter about people being mean to a new dad.
Yesterday, Facebook CEO Mark Zuckerberg and his wife Dr. Priscilla Chan announced the birth of their daughter, Max, and their intention to donate 99% of their Facebook shares (valued at $45 billion) to the Chan Zuckerberg Initiative, with the goal of “advancing human potential and promoting equality.”
Like most people's birth announcements, Zuckerberg's first baby picture Facebook status update (he used a “Note” which, really? Did you know those were still around?) was accompanied by an SEC filing, banner headlines, and near-universal acclaim.
It was a lovely moment for a guy who generally seems pretty decent, a woman who often seems pretty cool, and a baby who is obviously quite adorable. Until of course those cynical bastard journalists had to go and cock it up.
[jump] Buzzfeed pointed out that the Chan Zuckerberg Initiative is not a charitable foundation or non-profit, but a limited liability corporation. This is a distinction with a pretty important difference, given that non-profits are required to release detailed reports of their expenditures and 501c(3)s cannot engage in political activities, while LLCs can pretty much do whatever they want, including “funding non-profit organizations, making private investments and participating in policy debates,” according to a statement from Facebook.
The Daily Beast pointed out that the stock transfer could have significant benefits to the Chan Zuckerberg family as far as avoiding capital gains taxes and estate taxes. Gawker raised questions and concerns about what, exactly, this money will be going toward, and recalled Zuckerberg's disastrous foray into major philanthropy in Newark. Many noted that, according to the SEC filing, Zuckerberg will retain control over Facebook.
These are all good and important questions to ask and issues to probe, or, in the eyes of some venture capitalists, the equivalent of shouting “Fuck You” at Mother Teresa.
And here's Sam Altman, venture capitalist and president of startup incubator Y Combinator:
And here's Paul Graham, Y Combinator co-founder and union disruptor, telling us what he really thinks:
It's not surprising that VCs are circling the wagons on this one. It's much better to have people focusing on the generosity of the billionaire class than wondering how they were able to accumulate such obscene wealth in the first place, especially when you're in the business of wealth accumulation yourself.
But guess what, buckos! “Knee-jerk skepticism” is literally our job. “Inspirational magnitude of this unprecedented moment,” like a journalism degree, can get you a ride on Muni if you already have $2.25 in your pocket. Knee-jerk skepticism, on the other hand, is a pretty powerful tool that leads to asking the right questions, demanding documentation, and holding the rich and powerful to account. It's the difference between, say, focusing on a CEO's inspirational rhetoric and finding out whether her blood tests actually work. Which is to say, it is vital and imperative.
So bleat on, ye rich rich tweeters. Rest assured that we losers are hard at work, sorting through your bushels of bullshit and trying to figure out the truth.