Venture Colonialism: The Global South is Being Invaded by Venture Capital

A common theme across this blog, but I wanted to take some time out for us to talk about what we are looking at with regards to the ongoing interactions between VC and various countries in the global south. This is something that we will continue to discuss as this is a rapidly developing situation. 

 Specifically, I want to register my grave concern that the floating VC state is targeting countries in the global south, offering predatory “business development”, as that is how their colonial attacks will be positioned. 

In the midst of the bank turmoil and specifically the run on Silicon Valley Bank, the VCs are moving out of the American financial infrastructure with rapid pace. The spin is that the traditional banking system does not work for the “startup economy”, for tech innovation in general, and thus tech itself must seek more viable financial infrastructure — the financial infrastructure it is building for itself, of course. 

When SVB exploded, the VCs had several BANKS, including a16z bank Mercury, standing by to take over that market. 

In the midst of serious conflicts with the SEC and American regulation and law more generally around crypto, a new agressive build out by a16z startups with an eye towards establishing global trading posts outside of America is positioned as a solid business decision. 

If America won’t harbor the rising fascist state and recognize VC sovereignty… 

Someone else will. 

We have been tracking the quest for VC sovereignty… but they’re not going to get there alone. As discussed in the Network State by Balaji Srinivasan, ghost written by Marc Andreessen, the global south is going to pay a major role in this. If you’ve been paying attention using our critical lens, you are seeing a bidding war carried out in real time as various countries either opt in, or out, to the rising venture capital financial system. This seems to just be about Bitcoin but it has a far broader context. This is about recognizing or not recognizing venture capital currency and financial infrastructure more broadly. 

So, what we’re seeing is countries announcing their stances on the use of cryptocurrency, on taxes for “tech innovation”, on regulations of the VC body in general as far as crypto and AI development. This includes official adoption of Bitcoin by a country as well. Some countries are jumping through hoops, bidding the way a country bids to host the US Olympics. Others are sitting out, refusing to extend tax packages, refusing to come up with VC-funded tax shelters, refusing to adopt Bitcoin as legal tender, and so on. 

Most importantly, Coinbase has announced essentially an open bid for proposals, with their recent announcement that they are looking for a global trading HQ to escape SEC guidelines. Thus begins the process of pulling venture capital infrastructure out of regulatory bodies and outside of American control, especially when it comes to taxation. 

Specifically, what venture capitalists need from host countries is: recognition by countries as a sovereign entity, tax shelters, and land. To whit, El Salvador has just announced the passing of law ending taxation of all kinds (including income, property and capital gains) on (specifically) technology innovation, including cryptocurrency and AI development. 

I am deeply concerned about El Salvador.  A recent article in the Wall Street Journal, “The New York Couple Behind El Salvador’s Bitcoin Experiment”, highlights two of the people most involved with El Salvador’s “crypto” development, two venture capitalists, a couple, Max Kaiser and Stacy Herbert. Gross. They went in on an investment as early on 2013 with Peter Thiel’s Founders Fund, a company called BitPay, offering “corporate Bitcoin services”. I’ll do more extensive research into ties between the couple’s investments and the main criminal conspiracy we’re tracking, including Lux Capital, Founder’s Fund and a16z. But it is clear that they are there. 

The Kaiser/Herbert household got involved in El Salvador the first year that El Salvador adopted Bitcoin as a national currency. As the WSJ reports:  

“The bitcoin experiment in El Salvador hasn’t alleviated the country’s poverty and lack of funding needed for government spending. Bitcoin use in the country is scarce, financial sector and business executives say. Central bank data shows cryptocurrencies make up less than 2% of foreign remittances, which are a main source of income for El Salvador’s $29 billion economy. 

The country was wracked by gang violence and had one of the world’s highest homicide rates until Mr. Bukele suspended constitutional and civil rights a year ago to confront gangs. More than 60,000 people with suspected ties to criminal groups have been detained since then. Homicides have plunged as a result, the government says.”

So at this point we’re seeing that significant internal turmoil, political upheaval, suspension of civil rights, open violence, massive national debt and a struggling economy is making the country exceedingly vulnerable to predation by venture capital; in fact, the invasion is clearly well underway. 

These and similar countries - impoverished, in the middle of political turmoil, brought to their knees by global capitalism and imperialism, are in no shape to resist the venture capital state. People all around the world AND here have no idea what the venture capital state looks like, how it operates, and what its actual goals are. People in the US do not understand what these people are doing after they have been doing it for 30 years here. 

So we definitely do NOT have an international coalition set up to engage other countries on this topic, yet that is sorely needed. There WILL be resistance as the nature of the beast comes to light; but by that time, it will be too late. El Salvador has a GDP less than the assets under management of just ONE top VC firm. Again, the venture capital class IS its own nation-state, and these latest, rapid-fire announcements on the topic of crypto regulation in the wake of SVB, is evidence of venture capital as a nation-state, and even a global power, negotiating with other nation-states. 

Importantly, is a Peter Thiel-backed “startup city” in Nigeria. The reason why so many of these deals revolve around the establishment of tech cities — specifically cities — with sovereignty / no regulation or taxation, is because of that VC desire for a distributed nation with nodes in countries already devastated by US imperialism and capitalism. Reporting:

“Along the half-finished asphalt of the Ibeju Lekki Epe Expressway out of Lagos, flanked by marshland, unmarked farms, and rows of fledgling developments, there is an invisible point after which some of Nigeria’s laws suddenly no longer apply. In 2009, the Lagos state government declared a 150-square-kilometer patch of land along the Gulf of Guinea coast “the Lekki Free Zone,” offering tax holidays and other perks for companies who set up there.

‘The moment you are inside the zone, you are outside of the Nigerian state,’ says Omolade Adunbi, professor of Afro-American and African studies at the University of Michigan and author of Enclaves of Exception: Special Economic Zones and Extractive Practices in Nigeria. The rationale for the zone was simple: entice international businesses to establish a thriving industrial hub, and watch the newly created capital flow outward to the rest of the economy. ​​

So far, the projects in the free zone have been industrial, with an oil refinery, garment factories, and other manufacturing facilities looming over the scrubland. But a new project has its ambitions first and foremost in the cloud: a virtual startup city that will transform into a physical one when it lays its first bricks later this year...

Taking advantage of the Lekki Free Zone’s preexisting tax breaks to appeal to itinerant entrepreneurs, the founders envision the completed city as somewhere between the glittering spires of Dubai and Delaware, the small US state that is the registered home of more than 1.5 million companies from all over the world. The project’s investors include stalwarts of a controversial movement to build privately-owned city-states around the world, including Pronomos Capital, a venture fund backed by libertarian billionaire Peter Thiel; it’s also working with the Charter Cities Institute, a nonprofit that advocates for quasi-independent, pro-business zones to be established in developing countries. It already has its first high-profile partner in Binance, the world’s largest cryptocurrency exchange, which has agreed to help establish a blockchain-based financial ecosystem in the new city—in a country that has heavily regulated crypto trading.”

Backed by Peter Thiel, Marc Andreessen and their spokesperson Balaji Srinivasan — the nexus of the movement for venture capital as a sovereign nation-state — Próspera is a “Zone for Employment and Economic Development” in Honduras. The city was planned to have its own civil law, its own regulations, and profound tax benefits to tech investors. Key legislation for this was repealed in 2022, so the future of this “zone” is unclear; but this is another example of the same model playing out and Honduras will have a serious fight on their hands to resist this aggressive imperialism.

And in Nairobi, the “Silicon Savannah” is offering tax and immigration incentives for tech/VC.

In Vietnam, Decree 38 “allows VCs to use gold or even land-use rights to finance their funds.” The regulatory environment there has made the development of a thriving international tech hub challenging, and right now what we see is a country working its way through this process of trying to make it appealing to venture capital.

Another country I’m pretty worried about is Brazil. Coinbase just announced integration with the government’s payment system. This follows the opening of a Coinbase “technology hub” in 2021, which now hosts 40 engineers. Even Brazil, with 1.6 trillion in GDP, is looking at a colossal financial force as far as the full weight of the venture capital conspirators. 

We also have the case of Dublin, where tech has been invading a country that has been under continual invasion by colonial forces; a few concerned citizens there have created an animated film, a satire of Silicon Valley elite that I recommend you check out. In Dublin, the tech hub is called "Silicon Docks”. So again you see this constant theory of a distributed Silicon Valley with nodes, which materially is the distributed sovereign venture capitalist.

It’s getting very difficult to follow both the America conflict news and the global expansion, which are obviously deeply related phenomenons. The VCs are currently going to war to rip themselves out of America and as they are leaving we see their tentacles begin to tighten around existing invasions and indeed branching out their tentacles into new areas. I have always focused domestically, but I’ll try to keep you updated with what I see as I see it. 

We are seeing a new version of capitalism emerge as America falls, or to be specific, fascist corporatism rising. VC is the escape plan of capitalism as an economic system from a rapidly falling country in America. VCs are a new kind of colonial force, one that is pursuing a technofascist, distributed colonialism and attempting to bootstrap its way up from as many countries as possible into a global colonial power. They will be using these countries for tax shelter, land colonization, for cheap labor, cheap land, for recognition as a sovereign state, as well as a wide range of national resources.

In return, here’s one thing that venture capitalists will have to offer a host country: weapons from its new legion of weapons startups. Another part of the regulation side here is that a16z, Founder’s Fund and Lux Capital, with funding from the CIA, have been building out a serious military arm that includes everything from battlefield intelligence to war drones, AI-piloted planes, massive surveillance platforms, autonomous warcraft, and more. (You can read about this military build-out here.) VCs obviously want wide lee-way with their weapons development and have a great interest in establishing a global market for their weapons. America is just another customer to them. Global world conflict is an absolutely massive money and power potential for them. If allowed to continue on this trajectory, we will see the VC state operating as a sovereign weapons dealer.

This is a massive boon to potential host countries, if the VC comes with weapons attached and brings military power along with them, in addition to the economic packages. And of course, this all makes VC a sovereign military force as well and we need to talk about what that looks like.

The global south is a massively under-exploited resource for venture capital and especially as they feel resource-depleted within America, it is a whole new world for them. 

 We need to be looking for this happening to multiple or many countries that have been wasted by American imperialism and global capitalism. These countries lack participation in the global technology market and are desperate for money. Venture capital is perfectly positioned in this global environment to offer predatory “business development” deals, like the ones they made with San Francisco and Oakland, who are now shadows of the thriving cities they once were They are trading to gain recognition of sovereignty, tax sheltering, and land… and to invade and take over like they did in every other place they’ve touched.  

It is very clear we are very much dealing with land issues here so again, we really need to be thinking about the implications of venture capital moving into new digs after fleeing the US and be extremely aware of how this is the foundation for technofascist imperialism and global colonization by a new fascist state. Like they did in alllll the other places they’ve invaded, they will leave these places much worse off than wherever they started.