Tech’s Psychotic Break: ‘Fentanyl Capitalism’ Bets on Trump

Silicon Valley promises that technology will save us. But what if the financial system powering that dream is actually poisoning everything it touches?

In this episode of the Nerd Reich podcast, I talk with Catherine Bracy, author of World Eaters: How Venture Capital is Cannibalizing the Economy, about how venture capital’s jackpot logic has warped innovation, infected entire sectors of the economy, and is now blitzscaling authoritarianism in Washington.

From the origins of the “power law” to Peter Thiel's lectures on the Antichrist, this is the story of an industry that is making its biggest and riskiest bet yet—against American democracy.

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'Fentanyl Capitalism': How Tech Venture Capitalism Is Eating The World | Gil Duran x Catherine Bracy

Transcripts are auto-generated and may contain errors.

Gil Duran: Silicon Valley has always sold us a story that technology is saving the world. But what if the system funding that dream is a real problem?

Catherine Bracy: If capitalism is heroin, venture capital is fentanyl.

Gil Duran: Catherine Bracy, founder of Tech Equity and author of World Eaters: How Venture Capital is Cannibalizing the Economy, says the people who built our digital reality are overdosing on their own invention. In this episode, we unpack the culture of what she calls fentanyl capitalism. We discuss why Silicon Valley's obsession with unicorns is warping innovation and how tech's blitzscaling playbook is now being used to break our politics.

Catherine Bracy: It seems like they're having a collective psychotic break.

Gil Duran: From venture capital's origins in the whaling industry to its mutation in the MAGA era, this is a story about money, myth, and the people trying to literally eat the world. This is part one of a two-part series on fentanyl capitalism, also known as venture capitalism.

I'm Gil Duran and this is the Nerd Reich Podcast. Here's my conversation with Catherine Bracy.

Gil Duran: Catherine, welcome to the Nerd Reich Podcast. So venture capital is largely defining our reality these days, but I'm not sure most people really understand what it is. Your book, "World Eaters," explains it very clearly and warns how the venture capital model is warping reality and eating the world.

So we're going to get into that, but first you're the founder and CEO of Tech Equity, a nonprofit that envisions a world where the tech industry is responsible for building widespread economic prosperity and is held accountable for the economic harms it creates in our communities. And your career spans the intersections of tech, politics, and justice. So tell us a little bit about what brought you to the subject of technology and what got you interested in venture capital in particular.

Catherine Bracy: Thanks for having me. Well, I mean, my interest in technology started a long time ago. I mean, I guess it was really timing. I graduated from college. I wanted to be a journalist. And I graduated into the early 2000s. So it was sort of right at the beginning of the rise of the social web. And long story short, it just became clear to me that, you know, the reason I wanted to be a journalist was because I cared a lot about how people get information to perform their democratic duties and the vehicle through which they were getting that information was more and more becoming the internet. And so I really wanted to be involved in making sure that it was going to develop in a way that was good for democracy. Obviously that arc has taken a turn I didn't really intend, but that's sort of long story short, the thesis of my career, I guess.

Gil Duran: What got you interested in venture capital in particular?

Catherine Bracy: Yeah, so when I started Tech Equity, you know, we were working on issues where the rubber met the road for everyday people when it came to technology, how technology was impacting the labor market, how it was impacting the housing market. And at some point, you know, after doing enough of that work, you ask why enough times and follow that question upstream. The answer pretty clearly became venture capital. The economic incentive structure that is built around the technology is really what causes the technology to go in whatever direction it's going to go. I really wanted to understand how that incentive structure worked because it felt like the key that would unlock everything else we were trying to fix about how technology, the tech industry has gone off the rails in the last 15 years or so.

Gil Duran: So let's talk about venture capital 101. Tell us about the model. What is it? How does it work? And what makes it distinct from other forms of capitalism or investment? Let's strip away the jargon and talk about who's putting up the money, what they get, and how you win.

Catherine Bracy: I'm gonna try out a new metaphor here and you can tell me if it works or not. I came up with this when I was, you know, had to answer the question so many times, like, isn't what you're describing just capitalism? And the answer is no, but I didn't really have a great way of describing why it wasn't. So the metaphor I'm settling on for now is that if capitalism is heroin, venture capital is fentanyl. And I mean, it's essentially the same thing in different doses and formations, it has much higher potency and potential for negative externalities. And so I guess that's one way to understand it.

Maybe a little bit of history of VC: it was invented in the middle of the 20th century to solve a real problem, which was that there wasn't enough risk capital in the financial system to support breakthrough technologies, commercializing these sort of new innovations that people didn't really know if there was a market for yet. But if there was, it could be totally game changing and banks and other investors were just not really structured to take those kinds of risks. A group of civic and business leaders developed this hypothesis that was kind of based on the whaling industry from the late 1800s, that if you sort of pooled money from what are called limited partners—that is institutional investors, you know, endowments and insurance companies and pension funds—that in these funds, if you pooled that money, put their money to work and spread it out across a few dozen startups, you could spread the risk around and that likely you would have a couple of really big returners that could more than make up for the large number of failures because these are high risk endeavors.

And that ended up working. That portfolio approach and the distribution within the portfolio when you invested in that way became known as the power law. A small number of portfolio companies will be grand slams and the much larger number will be strikeouts. That dynamic defines everything in Silicon Valley. It has come to be sort of the fundamental law of how Silicon Valley has developed over the last 20 years or so. And the mechanisms through which venture capitalists try to ensure that they get those grand slam results is where the harms come from.

So, you know, if you're investing in startups at a very early stage, you have no idea which of the companies have the potential to be or will end up being that grand slam returner. So if you're trying to engineer that return profile in your fund, you are pushing all of the companies that you invest in to be those big returners, whether they have the potential to be those big returners or not. And when you're pushing those companies that aren't a natural fit for venture capital to behave in that way, a lot of negative consequences come from that behavior. And I think we all know what that looks like. We have example after example, companies that run roughshod over regulations or undermine workers or invaded our privacy or whatever, fracked our attention. All of these things are sort of outgrowth of venture capitalists trying to ensure that the companies within their portfolio end up being a grand slam return.

Gil Duran: So that's what you mean by power law. The power law of fentanyl capitalism or venture capitalism is a sort of a jackpot logic. You make all these bets, but a couple of them are going to be really big and the rest are going to be failures. Is that the basic thrust of the power law?

Catherine Bracy: Yeah, and then the next logical question then is like, okay, well then how do we achieve that? What's the playbook? That playbook that has developed over the last, you know, 15, 20 years or so is essentially where the heroin turns into fentanyl. No holds barred. There's no opportunity to leave any money on the table. You have to find the most profit-maximizing path at all costs. And oftentimes you have to engineer a profit-maximizing path, even if it isn't naturally there. Again, exploiting workers or cutting corners, just doing whatever you need to do to grow as fast as possible, to get as big as possible as quickly as possible.

Gil Duran: That basically requires finding these magical unicorn companies by hook or by crook, the ones that spit out billions of dollars. It's interesting to me the metaphor of the unicorn because unicorns are mythical and rare and they also have horns, which is a theme we're seeing more of now in Silicon Valley. But when the goal is maximum profit as quickly as possible, this leads to some warped thinking and changes the nature of the entrepreneur. You write about that in your book. And specifically you write, "For venture capitalists, the job has become not about finding companies that are creating breakthrough innovations that could spur large scale value creation, but about pursuing the power law returns that can make them very rich."

And this leads to something called blitzscaling, a word that's become popular and that merges Nazi war strategy with venture capital buzz strategy. We've seen a lot in the last decade or maybe last 15 years in Silicon Valley. And I would argue that now we're seeing a form of blitzscaling in Washington as tech comes into the Trump administration. Tell us a little bit more about how venture capitalism warps the entrepreneurial mind and how that's related to blitzscaling.

Catherine Bracy: Yeah, so blitzscaling is, you know, probably the most high profile version of this playbook. It's obviously the most evocative. I think Reid Hoffman probably regrets naming it. Everything you need to know is in the title, right? It's, again, getting as big as you can as quickly as possible. And the strategy is actually to be imprecise, an intentional thoughtlessness, I think I call it in the book, which is just, you know, we don't have time to take precision and to be thoughtful about the direction we're going. We just need to throw as much at this as we can. And the fallout is a feature, not a bug.

You know, this is where you got in the ZIRP (Zero Interest Rate Policy) era when money was basically free, just funneling money into basically a furnace to burn to subsidize market share. And all of that was like, if you were thinking of normal business logic, that would seem like a really dumb strategy, like very wasteful way to go about investing in growth. But for a company that's trying to take as much territory as quickly as possible and not really care about the consequences of that burning a bunch of money or subsidizing the cost of the product makes a lot of sense when you think about it that way.

So the psychology of how this took hold I think is really interesting to me. I started approaching it from like a pure economic rationalist perspective, like what are the economic incentives and how do people behave in reaction to that? And it turns out that a lot of it is actually cultural and identitarian. And there's this sense among the entrepreneurial community that like, we have to do this because it has become the definition of what success looks like. Even if I know rationally this does not make sense for my business, I am not a success unless I can raise venture capital. And having that like sort of seal of approval from Sequoia or Andreessen Horowitz or whatever the name brand firm is, is seen as part of the success of growing the business, even if it has nothing to do with the actual fundamentals of the business itself.

And what that did, I mean, it created this culture that then everybody sort of had to respond to. And then if you weren't, you know, you were sort of a deviant if you weren't raising venture capital. So everybody just sort of started assuming that that was the playbook they had to run. It kind of took over. Venture capitalists are very good storytellers. So this creating this aura of like, if you're in the in crowd, what you're doing is operating in this particular way without actually questioning whether that made sense for a lot of these companies. And then if an entrepreneur decided to go a different direction or said, "Hey, I'm not going to raise venture" or whatever, they were sort of demeaned and ostracized. These companies are called lifestyle businesses. And that's a very derogatory term in Silicon Valley. And it means that these are companies that just kind of grow naturally and don't need to have an exit in order to be successful. And that is seen as sort of a bad thing.

And so this culture developed that isn't responding necessarily to like rational economics, but it has taken hold in a way that is really hard to shift, you know, because it's not just about changing the economic incentives. It's about changing the way people think about who they are and what they do. And, you know, I know we'll get to this, but that I think has a lot to do with how this is showing up in our politics now.

Gil Duran: Tell us a little bit more about "exit" and what it means because I think a lot of folks out there don't really know and I think it says a lot about how venture capital operates that it's all headed toward this big event and that that event is more important than whether the business is successful long term. What do VCs mean by exit?

Catherine Bracy: It means that there's some payoff at the end of the day. So like they've invested this money and it's all illiquid. All of the value is really on paper. They can't really spend that money until there's an exit. And an exit is either the company goes public and they can sell shares on public markets or it gets acquired, purchased, whatever, by another company. And then, you know, that cash from the purchase comes back to the investors.

I guess there's one important thing to note about the structure of venture capital is like it happens in rounds. And so the idea is, you know, an early stage company gets a little bit of money. They hit certain milestones that indicate that they're on the path to success and they're starting to show, have some real data points that show that maybe they can be this unicorn or grand slam returner. You know, they raise a series A, there's a little bit more data. There's a little bit more money, they go to series B, all of these stages. And the idea is that along the way you're de-risking the investment because there's more information for investors about whether this company actually can do what it has promised to do.

So that timeframe is probably, you know, usually, and this is not true anymore because companies are staying private much longer, but like maybe that's a 10 to 15 year process. The investors need to figure out how to make money in the short term, right? They can't wait 10 to 15 years to get paid. And so they're sort of trafficking on some of these indicators that the companies may be, they may look like something that could be a unicorn in the future. And then they sell that to the next stage of investor and they mark up the value so then they can go back to their limited partners and say, "See, the startup is now worth on paper a lot more because I convinced this other investor to pay a lot more than I paid for it." And then that will convince the limited partners to give them more money to raise the next fund and they can charge their 2% fee on top and that's the cycle.

So that's all to say, trying to push them towards an exit at the end of the day was the way that you might realize these returns and getting a company to go public or get acquired is ultimately, I think, what a lot of these investors want. But it isn't the only way for them to make money. And I think that's where a lot of the distortion comes into play is that they just keep passing around as like a shell game with these companies among other investors in these earlier rounds while the companies are still private.

I think OpenAI is a really good example. You know, you have a $500 billion startup, a private company. Nobody knows really what their internal financials look like. I mean, this is unprecedented. The only reason we think it's worth $500 billion is because some other investor was willing to pay for a piece of the company at that valuation. They're able to convince limited partners that this is going to be the next big thing. So the limited partners give them more money to invest and they can take their 2% off the top. There doesn't really need to be an exit in order for the VCs at least to make money here. And I think that has distorted the innovation ecosystem as much as anything over the last decade or so.

Gil Duran: So venture capital is fentanyl, venture capital is a shell game, venture capital is a Nazi war tactic. I think they're apt metaphors. The metaphor is really defining the world. And so I think you come up with some good ones. Another one you have in the book is that venture capital is an infection and that the VC mindset has infected many different sectors: housing, healthcare, even food. And of course, politics, which we're watching now.

And one of the things that comes to mind about blitzscaling and some of these early companies and stories is that one of the ways they scale to reach their valuations is by breaking the law often or finding a place to operate that's not quite legal. They just start a new hotel industry as Airbnb, start a new taxi industry as Uber and Lyft, and they go from there. We're now seeing that approach in Washington as venture capitalists have become major players and one might say investors in the Trump administration. What do you make of the sudden parade of venture capitalists putting themselves at the center of our politics? And what exactly do you think they're betting on here?

Catherine Bracy: These are not great metaphors.

Gil Duran: Fentanyl, heroin, shell game, cannibal, world eaters.

Catherine Bracy: I called the book "World Eaters" because it's sort of a play on an essay that Marc Andreessen wrote in 2011, "Software is Eating the World." And, you know, my argument is actually it's not software that's eating the world. In his view, this was like, you know, everything now was going to be a tech company and software was going to go into hospitality and health care and all of these different sectors. It isn't, in my mind, about software going into all those different sectors—it's that then venture capital saw all of those different sectors as ripe for them to make money.

And so they started funding all of these companies that were, you know, the Uber for whatever, you know, going into healthcare, fast casual restaurants, or like direct to consumer mattress companies. You know, all of this stuff that like, if you're looking at the, you know, first principles of VC are not the type of companies that actually need venture capital to grow. And that sort of viral, you know, world-eating mentality is really corrosive to the economy because now you have this type of finance that is meant to fund hard tech or, you know, software companies going into all these areas that are just rife for problems. You know, one I care about a lot is housing. I write about that in the book. Going into every corner of the economy is really, really dangerous.

I've thought a lot about this. And I don't know if you paid attention—I can't remember, it was like right after the election, I guess, before the inauguration—Marc Andreessen went kind of on a podcast tour where he was giving a bunch of interviews about why Silicon Valley had moved so far to the right and what was behind his decision to sort of back Trump. You know, credit, I guess, credit to him. He was very candid about that, which I thought was very helpful insight into how these people think.

His grievance was that he thought he had made a deal. He called it a deal. It's unclear who with, but I filled in the blanks with like the Clintons and the Obamas and sort of the neoliberal political machine. And the deal was that Silicon Valley would be kind of left alone to build whatever it wanted to build and no one would come sort of knocking on their door trying to regulate their industry. And they would be viewed as sort of anything they built was a good in and of itself because the growth they were going to create was going to, you know, sort of trickle down to everybody. And they would be treated as heroes because of that sort of growth-creating behavior.

When Trump came along the first time and then Biden sort of reinforced this that, you know, no, actually we don't believe in your sort of economic view of the world and we're going to start holding you accountable and, you know, far from calling you heroes, we're actually going to define you as villains and like point out the bad behavior and how it's, you know, affecting all of our lives. And that really tripped them out, I think. And I know this because in 2017, right after Trump got elected the first time, I worked with a lot of them to fund what we were calling the tech resistance, you know, Sam Altman included, trying to raise money to get Silicon Valley to be a bulwark against this sort of populist threat.

And then when Biden sort of channeled that same energy, I think it really freaked them out. And they, you know, maybe not consciously, but subconsciously realized they didn't really have anywhere to go. And for me, their sort of desperate reaction of going to MAGA, which I think they now see as like, if we're not gonna be heroes within the system, we can at least just sort of grift our way out of this or, you know, this guy is transactional and we can buy him off rather than there being any sort of like ideological commitment to what is MAGA, I guess.

And that to me is the biggest indicator that, you know, we are at the end of that neoliberal economic era, which I think VC is sort of the perfect manifestation of. Neoliberalism is just perfectly encapsulated by the way that venture capital operates. And that's where this like heroin fentanyl, I think metaphor is really apt.

Gil Duran: World eating is an apt image for my next question. Lately, there's been a lot of apocalyptic talk coming out of Silicon Valley, talk of a god-like AI and a race to create colonies in space so we can escape this planet before it's destroyed. Eternal life through technology and science. Peter Thiel is traveling the world lecturing about the Antichrist. He calls tech regulation a potential agent of Satan. Other VCs like Katherine Boyle of Andreessen Horowitz are increasingly framing the destiny of venture capital as a battle between literal biblical good and evil.

And it seems to me that in a way venture capital inherently lends itself to existential thinking since it requires justifying extreme risk with extreme reward. And I think in many ways they view Donald Trump as a sort of political unicorn that they can use to get whatever they want. They're betting on him because the payoff of having a broken democracy and a system where the president becomes a crypto billionaire in six months and has no regard for the law and will blitzscale authoritarianism with the help of these guys who have, you know, Silicon Valley has very little to say about what's happening right now with Trump and with democracy.

So there does seem to be locked into this existential trip where they're making this really big bet. How does this end for them? They seem to be on a doom trip and it's either doom for us or it's doom for them. Or is there another way?

Catherine Bracy: I mean, it could be doom for all of us. I mean, I don't know what's going on. It seems like they're having a collective psychotic break. Their inability to reckon with the fact that their time is over, that the economic system that made them, and really this is all they have, I mean, they are empty, empty people. And the only thing that it sort of fills their souls is the success of their businesses. It may just be a reflection that nobody wants them anymore.

And so now they're just having this sort of breakdown. I think the only thing that, you know, the left and the right agree on right now is that we all hate the tech industry, you know? And so that sense of like, there's no place for us anymore is hard for them to reckon with. You know, I spent some time talking with some MAGA folks and folks from the Heritage Foundation and those corners of the world who work on tech policy. And the way that they talk about tech policy and the way that we talk about tech policy is really similar. And that's good, I think, for me, I like to think of that as maybe there's just like, that's like a kernel of hope that we can build on and nurture to get us out of whatever this world is that we're in.

In the same way that I see that as hopeful, it must be extremely threatening to the billionaires and like their sense of themselves is like really on the table right now. And that is driving some sort of crazy delusional fantasies that I can't even really follow the logic of who's the Antichrist. The Antichrist is the people, the people trying to regulate the technology is not the people building the technology. And it doesn't, it's not coherent to me. So I think the answer is the Antichrist is whoever we can convince people is the Antichrist. That's what Thiel's saying.

Gil Duran: That's a very common theme these days. Even South Park and the Joe Rogan experience have gone there. So it was an effort at memetic warfare, but he doesn't understand what a bubble he's in and the stuff that people might nod along with in your friend group is not the same as mass communication with the entire world, especially when you're a billionaire digging into religious themes that are already very controversial and not necessarily a religious expert.

Catherine Bracy: I think they're very good at like projection. The more he talks about the Antichrist, the more I think he might be the Antichrist.

The MAGA folks really hate transhumanism and I think they tie him, Peter Thiel in particular, to that but I think they also think of it as just like the tech industry and the AI industry in particular. So yeah, I don't think he's helping his cause. I mean, it's certainly only going to like create more common ground for like the far left and the far right, I think. Yeah.

Gil Duran: Speaking of the existential enemy, actually in a week or so is Hereticon, which is Founders Fund, which is Peter Thiel's one of his venture capital funds, throws an annual party where the theme is heresy, tech heresy, ideas that challenge the conventional wisdom. But the framing, and if you go and look at their website at Hereticon, is very mock Christian, mock biblical and there's even the phrase "be not afraid," which I think is one of the phrases that's most often repeated in the Bible. And there's this image of this sort of many-eyed feathered monster that looks like something you see on a deep, bad psychedelic trip.

He's over here lecturing on the Antichrist yet he throws this party, which having grown up in the Christian religion, if I did something like that when I was a kid, my parents would have called that blasphemous. You're not supposed to twist scripture. You're not supposed to mock biblical themes. And I was like, we should tell all the evangelicals about Hereticon if we want to be talking about the Antichrist.

Catherine Bracy: Especially in like the Steve Bannon corners of the MAGA movement, they call it blasphemy. I mean, they're like spitting when they talk about Peter Thiel. So I think there's something here that isn't really at the surface yet. You know, they're gonna fuck around and find out if they keep doing this.

Speaking of Hereticon, like I feel like I should keynote that. I mean, there is nothing more heretical in Silicon Valley than talking about different models for approaching venture capital and like questioning the dominance of the power law. So maybe I can get an invite.

Gil Duran: We'll try to figure that out. They do have a very strict screening process. I was going to try to go, but I realized there was no way into that room under my own name anyway. Let's get to the end game here. Can this system be fixed or does it need to burn down?

Catherine Bracy: They are currently in the process of burning it down, I think. You know, I wrote this book before the 2024 election. And so in my mind, this was maybe a blueprint for a Harris administration to think about how to, you know, do some market crafting here. It doesn't require the system to be fully burned down in order to fix it. I guess the answer is there are things you can do that don't require burning it fully to the ground. And also, they seem intent on doing it themselves. So like I'm happy to also build something from scratch if that's what they want to do.

And so I have been thinking a lot about once we're to the other side of this, whatever that looks like and whenever it comes, are we ready with some good ideas for how you would do it differently? And that's really animated how I've thought about carrying the book forward now. How can this be the basis for a new way of approaching the nurturing of an innovation ecosystem? We need technological breakthroughs. I mean, again, I'll go back to the housing market. That is an aspect of the economy where we desperately need innovation to figure out how to build more housing more quickly at a lower cost with better environmental impacts and how we get more people into homeownership, how we make it more affordable.

We need innovators thinking about how to solve those problems. But right now, we don't have the financial models that would support those types of solutions. And I think we don't have the space to think about it that way in the way that our economy is sort of conceived of and run. When we get to the other side of this, if they're intent on burning it to the ground, some of us have to have some, you know, models that we can pick up in order to be productive builders again.

So what does that look like? I mean, it kind of depends on how successful they are at burning everything to the ground and like where we're actually starting from. Most of it is actually carrot and not stick. Although I would love to see private markets be more transparent, especially now that individual 401k investors can be invested in private market funds, including VC funds. Like that seems like a really bad idea if there's no transparency on things like that. I think you could, you know, create sticks around.

But the carrots look like, you know, how can government use its role as a market crafter to direct or shepherd capital into different types of financial models. Like, how do we discover what are the right financial models to fund solutions we need in housing, for example? What does that look like? Who are the fund creators? How are those structured? And how do they get that capital from limited partners that they will need to scale those solutions?

That's a whole body of work that I think government can play a role in and has in the past. I mean, government has a long history of shaping markets. What I'm proposing is a little bit of like an industrial policy, but for the innovation ecosystem and the financial markets around it.

You know, some of the states have venture capital funds. I'd love to see them develop a different profile for how they look at the companies that they're investing in, like the way they're approaching the problem set, the theses that they're willing to fund. So I think there's a lot you can do on the side of catalyzing new markets or new approaches to funding without necessarily needing to come in and be punitive or enforcing accountability, although, you know, obviously we need that too.

Gil Duran: You get any feedback from the venture capital world for your book?

Catherine Bracy: You know, less than I was expecting slash hoping. I mean, I really did want people to challenge it, you know, because these funds are not transparent. They're not required to publish any data about how they work. I don't actually know with that much certainty that the approach I'm suggesting where funds should, you know, not try to force every company to fit a power law grand slam distribution. And maybe there's a way to build a fund around companies that are hitting doubles and triples instead of just grand slams, does that work? I don't have the data. I don't know if there's like a data set that exists that would tell you whether that works.

And so I would love to hear from more VCs who can say, "Yeah, this is how it works for me or not," or "Here's actually the nuts and bolts of how and why it wouldn't work." And that would suggest to me, not that it's impossible that maybe we just need other policy solutions. We talked about unicorns. The reason they're called unicorns is because they're rare. There are just not that many companies who are fit for purpose for this type of funding. And there are thousands of companies that get started every year and thousands of other market opportunities like housing that need new companies, new entrants.

I'm unwilling to concede that there is no financial model that we can find to fund innovation that works for the 99% of other companies, startups that get created every year. We've got to figure that out. If we are at the end of neoliberalism, it's got to be a really critical input to whatever this new economic order is that we're stepping into.

Gil Duran: Five trillion dollars and I can defeat the Antichrist. That's the model that appears to be...

Catherine Bracy: Where are we getting that five trillion from?

Gil Duran: Crypto, just crypto.

Catherine Bracy: Okay, great. That's where it is coming from.

Gil Duran: So, lightning round. What's the biggest lie Silicon Valley tells itself?

Catherine Bracy: Wow. That they're not the Antichrist. I don't know. I mean, it's sort of like they're, again, they're having this existential crisis. And existential crises usually come about because you realize that everything you've been telling yourself for however long is a lie. And they find it very hard to be honest with themselves about anything. And it is definitely an industry that attracts sociopathic liars. So it's sort of hard to say what is the biggest lie. Hard to pick one out of there.

Gil Duran: Makes me think of, you know, Thiel refused to give Trump money in 2020 and hoped to be done with him, but obviously is now back on the team. And makes me think of the line from "No Country for Old Men": "If the rule you followed led you to this, of what use was the rule?" And so they are in a high risk situation because if Trump doesn't succeed in turning this into a dictatorship, there's going to be some accountability, I think, for Silicon Valley and the people who went along with this. Not only do they go along with it, but they tried to fund it. They tried to make it happen, right? They tried to scale this shit.

Catherine Bracy: I mean, ask the Russian oligarchs how it's working out for them. Like, even if he does make it a dictatorship, it's not guaranteed. You know, there could be some billionaires falling out of windows in 10 years. They're very short-term thinkers too, so they haven't, I can guarantee you, they haven't really thought this through. It may not end well for them either way. I will make it my life's work to hold them accountable.

Gil Duran: Let's connect on that goal. Next question. What's a VC buzzword you never want to hear again?

Catherine Bracy: Oh my God, so many. Growth hacking? That's maybe one I don't ever want to hear again.

Gil Duran: What's the one reform that you think would make the biggest dent?

Catherine Bracy: Limited partners not being enthralled to the power law? Like if there were a way to diversify the mechanisms, I don't know that there's one lever that you would pull, one policy lever you could pull, but I think there's like a collective mindset shift that like the current VC approach is not actually that fruitful and that we should be putting money into different fund constructions. Sorry, that's not very pithy or lightning roundish, but it's more of like a deeper systemic thing that's going to need to happen here.

Gil Duran: Catherine Bracy, thank you for joining us today on the Nerd Reich Podcast.

Catherine Bracy: Yeah, thanks for having me.

Producer: And that's a wrap on this episode of the Nerd Reich Podcast. The show was produced by me, R.R. Robbins. It was written and hosted by Gil Duran.

Remember you can buy Catherine Bracy's book, "World Eaters," at Bookshop.org, your local bookstore, or anywhere books are sold.

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Today's final words from the Roman lyric poet Horace. Old Horatius says: "Begin, be bold, and venture to be wise."

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