What captured the attention of the Twitterverse of late was the thread from Bolt founder Ryan Breslow (@theryanking) who called out the Silicon Valley Mob. We quote: “two forces have the most power in Silicon Valley. And like… tenfold more than anyone else. Their names: Stripe and YCombinator. The kicker → Their power is in how they work together. Stripe is the darling child of Silicon Valley. Early to YC (YCombinator), Stripe made payment processing APIs easy and signed up all their YC batchmates to use their product. The “official payment processor for YC”, Stripe became a HOT company. Sequoia, the most powerful VC firm in the world, went all-in. Their position today is upwards of $20-$30B in Stripe stock.

 

By the Numbers

“Three forces combined quickly: 1/ The most powerful VC firm in the world. 2/ The most powerful startup accelerator in the world. 3/ The most powerful startup in the world, with the help of #1 and #2.”

“1/ Stripe had deliberately taken checks from nearly all the top-tier Silicon Valley investors in order to block new companies IN FACT, many of their investors had told me as much, and commented on it as a great strategy!

2/ Any time investors would backchannel us, they would get scared away. Stripe, YC, and associates knew just what to say to the investors to get them to back away. Intentionally or Unintentionally, the forces that be made it 10X harder for us to fundraise.”

 

And the tech media fell right in line, according to Breslow. Specifically, Hacker News and considering that the big VCs have a lot of portfolio companies and announcements to make, what media outlet would want to miss getting a story from them? Or an exclusive? Or have the distinction of being the first outlet to break the story or announcement? Breslow’s claims are not beyond the realm of possibility.

Does Stripe (Ventures) specifically launch companies to compete with their competitors? Or YCombinator interview companies strictly to gather intel? That’s business and is it a shocker that theft is part of the Silicon Valley DNA? How often has Meta nee Facebook ‘appropriated’ features first launched by their competitors?

Careful whom you talk to and to what extent you want to open the kimono.

“5 yrs into Bolt, pouring my blood and sweat into this business, we had finally managed to raise a Series B and C round. Things were starting to pick up. Then one day, I woke up to find that a newly launched company, with near zero traction had raised $100M.

“From who (sic)? Stripe.

“Nearly overnight, I had a new competitor with roughly the SAME VALUATION and MORE CAPITAL in the bank than us. They did their deal with the Mob, allowing them to own a considerable amount of equity in their company. Plus a commitment to pay their payment fees.

“Stripe wants you to think they’re the darling, pro-startup, unicorn company who everyone loves. The reality… if you stand in their way, they will do more than compete with you head on. They will use every power move imaginable. Blocking you from capital, media, talent. And funding competitors just to get back at you.”

Breslow referred to the ‘consortium’ as Mob Bosses: “Mob Bosses control resources in a particular geography. If you don’t pay them their fees, you don’t get access. Even if they’re not doing anything illegal, that’s exactly how Stripe and YCombinator work. 2%-3% on your processing. 7% on your cap table. $400k-$500k as an MFN on your earliest valuation. Pay their fees and get ACCESS to their territory. Pay YC their take, and you now can sell your products to YC companies. Don’t pay their take, and the YC company that does gets all the YC companies as customers. They call it “empowering your batch” I call it The Mob.”

 

Mob bosses/tech cabal, tomato/tomahto. We called the monopolistic tendencies of certain sectors of tech a long time ago and who was surprised by the thread, which we’re sure had at least some elements of truth? Are Breslow’s points – and conclusions – valid or does he have an axe to grind? Or is it a bit of all the above?

Truth be told, consolidation of power and influence has long been the name of the game in tech, particularly in Silicon Valley.

We make no judgements, but at the end of the day, it seems to us that given the various machinations that seem to manifest themselves, again, particularly in Silicon Valley, the lines may well be somewhat blurred when it comes to the distinction between bad apples and sour grapes.  Onward and forward.