Advice to the Gulf States: Freeze Out the VCs
What do you do once the Chinese money dries up?
When times are good, these VCs are at the top of the world. Now times are going bad, so they’re toddling around the world with a tin cup. In a big whoosh, a lot of Chinese cash has left the United States, leaving these guys high and dry.
Silicon Valley investors are touring the Middle East, seeking to build long-term ties with sovereign wealth funds during the worst funding crunch for venture capital firms in almost a decade.
Top technology VCs such as Andreessen Horowitz, Tiger Global and IVP have jetted teams of executives to Saudi Arabia, the United Arab Emirates and Qatar in recent weeks, according to people with knowledge of the trips.
These visits come after their traditional North American and European backers contend with an economic downturn that has forced them to rein in private investments.
VCs are, in turn, being encouraged to come to the region, as Gulf officials and young royals seek to diversify their economy away from petrochemicals with investments into hot tech sectors such as artificial intelligence.
That has also meant that some VCs have quietly reversed earlier decisions to refuse meetings with, or cash from, politically controversial nations such as Saudi Arabia.
“We came to San Francisco looking for them in 2017. Now . . . everyone is coming to [us],” said Ibrahim Ajami, head of ventures at Mubadala Capital, a $6bn arm of Abu Dhabi’s $790bn sovereign wealth fund. “The tech correction has humbled the industry.”
Andreessen Horowitz has serious problems, very little of what they do has any benefit to America.
These guys portray themselves as business geniuses at the forefront of innovation, but most of what they invest in has nothing to do with that.
To the princes of the Gulf, if you want to show yourselves a friend to America: send these guys away empty-handed. We need new elites, new businessmen, who are willing to put their country first. This crop has failed.
New opportunities will come along, to help build a better world. Forget these desperate mercenaries.