What About the LPs? Are They Using VC to Launder Weapons Manufacturing?
There’s been a major shift in the tech world over the past few years as two of the top VC firms, Founder’s Fund and a16z, are leading us down the road to war, co-investing in a full fleet of new weapons companies. This a small group of people driving the entire industry into weapons manufacturing, including drones, autonomous vehicles, battlefield “OS”es, and AI-piloted aircraft. These technologies are already being used live in production in conflict scenarios.
This new build-out has been grounded with Anduril and Palantir as the “cornerstone startups”; a third, Skydio, the leading provider of drones in America while somehow remaining under the radar, is now set to join them with a new funding round of over 230 million dollars. While not “hidden” per se, this agenda has certainly been covered by AI, crypto and metaverse hype and slotted in under the “American Dynamism” investment category invented by Founder’s Fund and a16z, so that it looks like some kind of New Deal, Americana populist movement, which I have covered more extensively elsewhere in this blog.
What is happening here is that venture capitalists are actually building out a military and that is being done with precious little regulation, insight or oversight whatsoever, much less literally any kind of industry consensus. Palantir’s CEO recently discussed going live in war zones without even needing payment up front, while Anduril’s CEO popped up QUICK in the Ukraine when shit started popping off there, putting its attack drones into production use. Regardless of how you feel about the war, it is a beta demonstration of the new powers venture capitalists have to operate as autonomous agents deploying into active combat situations. Dangerous stuff!!
We have to look at the venture capitalists in this situation, but we also have to look at the people that VCs themselves are getting money from: limited partners. Who really funded the “American Dynamism” category that this war build-out is coming from?
LPs are one of the biggest and tightly held secrets in the industry; we simply don’t know who is giving the VCs all this money to fund startups. We might know a few examples but by and large these things are considered trade secrets of the firms. While we know a little about what TYPES of investors these are — sometimes pension funds, sometimes school endowments, a number of wealthy families and trusts, hedge funds and so on — these are considered “trade secrets” or competitive intel; thus, they are kept largely hush-hush. So we don’t actually know where the money for the weapons is coming from. We know that venture capitalists are driving this agenda, but the LP side of the equation leaves a lot of questions.
The fact that we know almost nothing about that side of the equation is deeply concerning and it is alarming that more transparency around the LPs hasn’t been much of a priority for the press or the critical public or workers within the industry itself. They are the original source of the financing and you cannot have a functional understanding of what is going on without that. When you are looking at things like creating an entire startup military, it would seem essential to know these facts. They are directly funding these weapons startups and their identities are hidden behind these venture capital firms, who serve as a obfuscation for the big money. Further, we don’t know how much LPs are “hands on” in driving the venture capital agenda, and it probably varies across the LPs, but where it comes to topics like escalations in global wars using an autonomous military backed by a conspiracy of venture capitalists, the questions truly come to the fore.
When we look at how that could potentially work when you are dealing with a military build out, you’re looking at a situation where mystery money is going into the VC firm, and out the other side of it, is emerging dozens of tech-backed weapons companies that are able to deploy live into conflict zones with very little oversight. This strikes me as a form of laundering various violent interests and we don’t know the full picture of who these startups are beholden to. The VC vehicle in this case is providing a laundering service of sorts where there is that layer in between, a veil of secrecy that is upheld in the firms, across the industry, in the press and especially in the financial sector.
Whoever is backing a16z and Founder’s Fund in these investments, is also getting weapons back, not just money. We need to know who those people are and what their intentions are; these VC trajectories are incredibly frightening and who knows what kinds of terrorists and war lords and coup engineers are involved in this; who knows what direction they are paying to have those weapons aim at when its ready to go.
When you work in the industry, the issue of “the LPs” is considered pretty much dust done and settled: we don’t know who they are, but we think of them as “dumb money”, that they are basically throwing down the cash and then walking away, and they are just in it for the returns. Further, that these are simply allocated as part of market diversification strategies, with VC funds representing the high risk allocation, but there’s no reason to believe this is the only motivation especially when what is emerging from these deals is not just cash returns but actual actors in the market and actors in society and the relations of society — powerful, wealthy startups protected by venture capitalist who are out in the world driving very specific agendas — not only warfare, but also the development of an alternate, unregulated, sovereign financial system (crypto), the metaverse, and artificial intelligence.
The assumptions made about LPs are the same ones that that are made about VCs themselves: dumb money, DEFINITELY not a massive conspiracy that is driving some kind of broader agenda outside individual returns on an individual company. Thinking critically about the role of venture capitalists, means that we also have to be thinking critically about LPs.
Think about it: to the LP, the VC is like a magic box they can put money in and not only financial returns, but a bunch of other economic instruments come out: business models for housing destabilization, for disrupting incumbents in schools and health care, for creating the landlord class or the gig economy, and so on. Without it even being tracked back to them.
Weapons laundering. We need to be looking MUCH deeper at this war agenda and get the full financial picture of who is responsible.