Who’s Paying For Lunch?

I’ve always been a fan of the old saw, “there are no free lunches.”

Not too long ago I heard this re-framed as “someone has to pay for lunch, and I don’t want it to be me.” I much prefer the second version. It underscores the fact that you can’t destroy risk. You can only lay it off onto someone dumber more willing to bear it than you.

The Wall Street Journal reports on enterprising San Franciscans gaming referral bonuses from VC-backed startups:

Elad Ossadon and Noam Szpiro, who work in software engineering, have become referring pros. In 2016, they created a website called VC Fund My Life, which catalogs discounts and freebies. When a user signs up for the startups listed, they get a referral bonus, often altered by a buzz of their phones.

Mr. Ossadon said before he started the site, he was pushing startups with bonuses on anyone he knew.

“Friends that visit here, move here—friends of friends, random people,” he said. His reward: free burgers and Thai food delivered by startup Postmates and “months over months” of free housecleanings from on-demand services company Handy.

In all, Mr. Ossadon and Mr. Szpiro estimate they have earned over $10,000 in referral credits, although many startups have started to put an expiration on the credits. “The challenge after a while became, can you use your credits before they expire?” said Mr. Szpiro, in a gray knit shirt acquired with the aid of referral credits from online retailer Everlane.

This is one of those “squishy” data points worth paying attention to. Low interest rates encourage investors to move into “long duration” equity investments such as biotech, cryptocurrency and (of course) venture capital. Even with all the talk we hear about “rate jitters” these days, capital remains cheap and cash incinerators are objects of envy.

Guess who’s paying for lunch?

 

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