David Sacks, Silicon Valley, and The Secret Chinese Cofounders and Backers Who Run The Place
David Sacks, Silicon Valley, and The Secret Chinese Cofounders and Backers Who Run The Place
Is it all just an elaborate play? And the anti-David Sacks trade...
“All the world’s a stage,
And all the men and women merely players;
They have their exits and their entrances;
And one man in his time plays many parts…”
In light of recent events I think we really need to investigate the possibility that many of the “innovators” are in fact money launderers — the sons of mobsters — who were well educated at America’s (allegedly) finest schools and who serve foreign powers, especially China, Russia, and Israel. These are big claims but, I fear, the mounting evidence supports them.
If it is true, it raises a lot of policy questions for how we ought to address Silicon Valley and its antics. We’ve elsewhere looked at David Sacks’s ties to the real mafia through marriage as well as his strange history.
We have delved deeply into this topic in our inquiries into Silicon Valley Bank, Sam Bankman-Fried and of course, Elizabeth Holmes and UBiome. Holmes tried to flee the country but Jessica Richman and Zachary Apte actually did and they are at large in Germany after committing immigration fraud to obtain citizenship! Hey, some journalist should ask the new Schulz government about this! Or is he too busy running cover for Wirecard?
If Silicon Valley is such an engine of innovation where are all the innovations? Why do so many business models fall apart with even cursory fact checking? What’s that about? And why do the few businesses that really work seem very Chinese?
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One of the cofounders of PayPal is Yu Pan. You don’t hear too much about Yu Pan though by some accounts — notably Peter Thiel’s in Zero To One — Pan was one of the six key people for starting PayPal.
We do hear mention of Pan in The Founders…
“As Fieldlink’s new CEO, Thiel stepped up the pressure to launch the company. As he surveyed the market, he saw a gathering blizzard of activity—every minute, it seemed another start-up was born. Thiel emphasized the need for swiftness—in hiring, fundraising, and releasing products. One day, Thiel pushed Levchin to recruit more engineers.
“Well, yeah, but I’m coding,” Levchin remembers telling him.
“But you need to hire more engineers. You’re the CTO,” Thiel said.
“Sure, but I don’t know anyone.”
“You just graduated from one of the better computer science programs in the country. You don’t know anyone?” Thiel replied.
“Oh, well, I guess I know some…”
Levchin considered two of his former UIUC classmates: Yu Pan and Russel Simmons. He had worked with both before, subcontracting one-off programming projects to them when his plate was full.
Following graduation, Yu Pan moved to Rochester, Minnesota, to work at IBM. But he second-guessed his decision after surviving his first Minnesota winter. Simmons described Pan’s bleak existence: “He would go to work, come home, eat rice with oyster sauce every day for dinner, and then play online video games.… It was totally sad.”
In the winter of 1998, Levchin pitched Pan on Fieldlink—and the prospect of moving to California. Despite the draw of a more temperate climate, Pan was wary. He had made good money from Levchin’s subcontracted programming work, but he thought of Levchin as a flake. After graduation, Levchin had abruptly left for California, without much warning to Pan and other friends. Several of Pan’s emails to Levchin went unanswered. “He just disappeared.… What the hell happened to him?” Pan remembered thinking. “Am I going to get paid or anything?… In my head, it was like, ‘Max—unreliable.’”
Levchin reassured him that Fieldlink was a real, funded company—and he’d stick around this time. Initially, Pan gave Levchin a resolute no: “I was like ‘F-U, I’m not coming out. This is the most idiotic thing I’ve ever heard. I am not going to trust you.’ ” But Levchin kept selling the upsides of working at a start-up as well as Palo Alto’s balmy climate and vibrant ultimate Frisbee scene.
Pan slowly came around, but there was another obstacle: Pan’s family. Like Levchin and Thiel, Pan’s parents were immigrants. They viewed Pan’s IBM job as a solid, stable opportunity conveniently located close to home. To them, Levchin’s start-up was the opposite in every way that mattered: a company no one had ever heard of, run by a college friend of their son’s, far away from Illinois. “They needed a little convincing,” Pan said.
Pan asked Levchin to come to Chicago to do exactly that. Levchin hopped on a flight, went to Pan’s home, and sold the family on the opportunity. The elder Pans satisfied, Yu Pan agreed to join Fieldlink as a senior engineer.”
It’s possible that that story is true but I tend to have my doubts. The vibe is off. Pan stayed on for another four years doing “tech work” before moving to YouTube.
Now it’s hard to find exactly where Pan was born. Some accounts say he’s born in China. Others say he’s born to Chinese parents in America. Try and figure it out. I couldn’t! I gave up!
Recall further that Levchin went on to found several very Chinese-connected companies, including Glow (which weirdly helps track pregnancies) and Affirm (which offers near usurious rates to buy Chinese-made consumer goods).
It’s gauche to talk about the Chinese guy in the backroom but there’s one at Tesla (Tom Zhu) and at LinkedIn (Eric Ly). In fact there’s a Chinese guy in the backroom at virtually every one of the major tech companies so much so that it’s kind of a cliché.
In some cases there’s even a Chinese in the bedroom: Mark Zuckerberg and Priscilla Chan, Jason Calcanis and Jade Li, Sequoia’s Roelof Botha and Huifen Chen. An unwillingness to focus on the Chinese or Asian wives is to understate their influence on some of the most powerful men on the planet. If this isn’t racist or sexist I don’t know what is. Now I’m sure no one’s wife controls them but let’s just say that getting divorced in California is not exactly a pleasant affair. That’s always lurking.
In South Asia it’s common to see an Ali Baba business — Ali is the brown face while Baba is the Chinese guy in the background. I suspect we will learn a bit more about this as the Southeast Asians become the designated middle men as Chimerica breaks up.
Of course you’re not really supposed to ask how many businesses are this way in Silicon Valley and if they might generally be a thing.
A major reason a number of venture funds are “founder friendly” is because its easier to have established channels for moving money into the United States. Genius is, by its very definition, hard to grok. The true geniuses appear almost alien. Think John von Neumann at his best. But genius can be faked. You can have the trappings but not the talent.
Sequoia has to pretend that invested with Sam Bankman-Fried when they know full well they were just moving Chinese money and taking a fee. You’re supposed to pretend too — at least when interest rates are high.
Short seller (and my new friend) Marc Cohodes is right to ask who is Gary Wang — that weird Chinese guy around FTX— and what exactly his role in the whole psychodrama really was.
Another way of thinking about it is that much of Silicon Valley is about casting. This is, indeed, why so many of them have been involved in Hollywood.
The actors are white or Jewish faces, preferably from Stanford (though Harvard and MIT will do in a pinch) with Asian money and technology.
But who is the director? And what happens when there isn’t the money to pay for the elaborate play?
Why you might even try to make everyone freak out. Or as Jason Calacanis — whose first investor was David Sacks — put it…
But the macroeconomics is teaching a harsh lesson that might have been taught by Beyoncé, herself married to Jay-Z, who sold his weird company to Jack Dorsey’s Square.
“Don’t you ever get to thinking you’re irreplaceable…”
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Let’s dig into Craft Ventures, which I suspect is a front for the Chinese and Likud Israelis.
First the Chinese through “Bill Lee” or “Joseph William Lee” and then through the Likud Israelis through Bird and Rumble.
Lee cofounded Craft Ventures with Sacks, and also apparently co-founded another VC firm with Sacks in 2017 called Sacks Ventures.
Bill Lee was CEO and co-founder of Remarq. Before its acquisition by Critical Path in March 2000 for $265 million, the company developed high-volume messaging for sites such as eBay, Sun, Novell, and Amazon — an ideal place if ever there were one for listening in on American tech.
Remarq seems to have been an early Yammer, which itself was spying on conversations within companies. Yammer was ultimately acquired by a very compromised Microsoft. Sacks also started Geni, which was acquired by MyHeritage, which has long running ties to Israeli intelligence.
Lee’s current focus on eSports and his pioneering of monetizing virtual goods is highly suspect, as that’s a known money laundering channel.
We also see Lee trying to get social proof. Lee married Al Gore’s daughter Sarah Gore in 2007 at the Beverly Hills Hotel. Both Lee and Sacks were early SpaceX investors. Lee also backed Yammer, which Sacks founded and ran as CEO.
They also invested in Tosca Musk’s porn oriented venture — PassionFlix — alongside Bill Lee, Dana Guerin, Jason Calacanis, Kimbal Musk, Lyn Lear, Norman Lear and Patrick Cheung. PassionFlix was founded by Tosca Musk.
Sacks co-founded blockchain startup Harbor as an incubation of Craft Ventures in 2017. The idea for Harbor seems to have come from Lee.
Joshua Stein, CEO of Harbor, was preciously the General Counsel and Chief Compliance Officer at Zenefits. Sacks was CEO, COO, and investor of Zenefits.
Bill Lee was, of course, appointed by the Mayor of San Jose to the Redevelopment Committee of San Jose, a known hub for Chinese money laundering into real estate. (Rather interestingly Sacks have been calling for
Lee also invested in AngelList, which was heavily Chinese compromised. AngelList’s Naval Ravikant repaid the favor and called Sacks “the world’s best product strategist.”
Rather hilariously Bill Lee founded “My Doge Inc.”
“For instance, David Sacks explained how his firm has had exposure to Solana since the protocol’s early days through an investment in the crypto investment firm Multicoin Capital, and that they have now made ‘about a billion dollars’ in return from the investment.”
Solana private token sale led by a16z in June 9, 2021, including Multicoin Capital. Bill Lee, Marc Andreessen, and a16z partner Chris Dixon were also investors in Multicoin. Bill Lee, Solana, Alameda Research, and Multicoin raised money for Render Network. Multicoin invested in Harbor.
Solana Labs, Multicoin were accused of violating securities law by a Solana token investor after Solana whales could dump their cheaply bought Solana tokens.
Sacks was pumping it up.
"… David Sacks explained how his firm has had exposure to Solana since the protocol’s early days through an investment in the crypto investment firm Multicoin Capital, and that they have now made “about a billion dollars” in returns from the investment."
"“The ultimate bull case for Solana is that it supplants Ethereum as the dominant Layer 1 smart contract platform,” he said. In other words, Solana aims to be the place that DeFi money goes to play."
That's exactly what Sacks said in that podcast, it seems.
Multicoin Capital also got backing by none other than Binance, the shady crypto firm said to be a front for Chinese intelligence.
"Multicoin also said at the time that it had traded on three exchanges: FTX, Coinbase and Binance. Now, 100% of its assets “outside of the capital stuck on FTX” is on Coinbase or in self-custody “multi-sigs,” meaning multiple disparate signers are required to control funds."
"Multicoin took another big hit with FTX’s failure because of its hefty position in the Solana token. Bankman-Fried was a big booster of Solana, and Alameda was a major holder of the coins."
Multicoin seems to have been focused on pumping Solana:
"Three LPs who asked to remain nameless explained to Axios that Multicoin closed out significant positions during the 2021 bull market. However, instead of returning at least part of these realized gains in cash to its backers, the company instead reinvested in Solana's native coin, SOL."
"According to a document seen by CryptoPotato, several prominent names in the cryptocurrency industry joined forces to establish the multimillion fund and assist with The Graph’s future progress. These include the US-based Digital Currency Group, the investment firm Multicoin Capital, gumi Cryptos Capital, NGC Ventures, HashKey, and Reciprocal Ventures."
Could all of this crypto investing have been an elaborate way to pay off its early investors in the hopes that they might get engaged in politics?
If you take this frame seriously you’re left to conclude that Sacks’s real job is moving money — and using his fee to influence the politics.
In a subsequent post we will examine the degree to which these crypto people move money through luxury real estate. We will also explore the degree to which one VC’s entire career is due to social proof — and compromising of federal law enforcement. Here’s looking at you, Katie Haun! You’re an object lesson in how there are many Charles McGonigals running around.
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David Sacks considers himself a renaissance man — literally in that he seemingly wants a return to feudalism — and often sounds off in politics, usually in a neoconservative or anti-intervention direction.
Sacks first got involved in politics in a major way, at least financially, by funding the recall of Gavin Newsom in 2021. He’s hosted fundraisers for Governor Ron DeSantis as well whose position on the Ukraine War eerily tracks Sacks’s own.
Why has David Sacks become such a big backer of right-wing causes all of a sudden? Has he been ordered to? Two other investments may suggest just that — Bird and Rumble.
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A few years ago I heard a pitch for Locals.com, a kind of “alt tech” play that boasted my erstwhile friend Scott Adams as an investor.
The company was cofounded by David Rubin and Assaf Lev, an Israeli officer who was very difficult to find online.
It became quite clear that the Locals platform was a way by which the Israelis, particularly the Likud faction, could move money outside of the GoFundMe/Patreon modes which were increasingly coming under anti-money laundering review.(GiveSendGo is another one of these types of operations, albeit focused on a more religious group.)
Locals was ultimately acquired by Rumble, a video platform backed by Peter Thiel and now Senator J.D. Vance. You might wonder, as I do, if perhaps this Locals acquisition was a way of paying off a lot of the early investors in Locals — including David Sacks. Sacks’s Craft Ventures continues to buy up Rumble stock.
Weirdly the platform pays Glenn Greenwald, Russell Brand, and a number of conservative influencers. You might wonder — as I do — who Glenn Greenwald really works for.
How the company can be worth $2 billion and counting is anyone’s guess. If we work on revenue comparison and look at independent valuations of Youtube as a standalone company, maybe Rumble is worth $200 million.
Rumble announced that it was moving its US headquarters to Longboat Key, Florida. Rumble was founded in October 2013 by Chris Pavlovski, a Canadian technology entrepreneur.
If I were trying to find a way to short Sacks, I’d look here.
More likely we should see Rumble in the same as the rest of the alt-tech ecosystem — dead on arrival. YouTube and Google generally were turned by US intelligence sometime in 2019. Google continues to hire loads of ex-intelligence people.
In much the same way that the U.S. government worked to shut down One America News or Fox News, so, too, should it shut down Rumble.
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We’ve elsewhere talked about David Sacks’s ties to Bird, the electric scooter company.
Bird may well go from being the fastest company valued at $1B to going bankrupt. Sacks’s fund put millions in Bird before Roelof Botha’s Sequoia turbocharged it.
You might ask yourself what that’s really about.
The Bird stuff is even more depressingly weird than Rumble. It even shows the extent to which China has penetrated even electric scooters. Xiaomi, the so-called Apple of China, was building all those scooters.
“Rebranded Xiaomi scooters have been deployed across US cities by scooter unicorn Bird, which in May reportedly locked in Xiaomi for tens of millions of dollars as one of its vendors.”
Bird was sourcing its batteries from China which was itself sourcing the raw materials from the Democratic Republic of Congo by an Israeli slaver named Dan Gertler.
Gertler was sanctioned by the U.S. government for his brutal mining practices and general corruption —and then removed from sanctions during the Trump years at the request of corrupt Mossad director Yossi Cohen and the urging of Jared Kushner and Steve Mnuchin.
No matter. When President Biden signed an executive order on rare earths elements he essentially killed Bird.
I’m going to increasingly write about the effects of macroeconomics on the stock market. I may put some of this material behind a paywall. I haven’t decided yet. Help me avoid it by subscribing, paid or free.