Hey Jessenture Capitalists

As a digital marketer and business owner, I have been in and around the startup scene, both locally in my native South Africa and abroad for some time now. Speaking to aspiring entrepreneurs both in tech or traditional markets all trying to make it big, to strike it rich, to be masters of their destiny. The startup scene is filled with bright ideas, bright people with shit ideas, shit ideas and shit people with shit ideas and guess what? 

They all don't matter!

Startups aren't about how revolutionary your product or idea is or how it can produce insane levels of productivity to bring about the improvement of those around you and create jobs. That's all the narrative used to show something a lot more sinister that will catch up to many who are about to retire. I know startups and retirees sound like two opposites but stay with me, I'll get to it and oh what a tangled web we weave.

![](https://i.insider.com/5d7179ca2e22af16b05e2a75)

**Image source:** - [businessinsider.com](https://www.businessinsider.com/funny-silicon-valley-memes-mocking-coding-tech-bros-san-francisco-2019-9?IR=T)

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TLDR - The simple reason pension funds looking for yield propping up the market and incentivising gambling on TAM (Total Addressable Market).

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## Startup culture

Startup culture by definition isn't inherently a had thing it has been tainted by the promise of riches and attracted the wrong crowd who are willing to game their way into some cash since all it takes having no morals or work ethic. 

Have you ever wondered why startups are never about making a profit, it's all about getting more funding, more funding is what keeps startups alive since most of the time they're pieces of shit. Any idea can get off the ground with enough funding and stay alive for a considerable amount of time, look at Theranos. 

## Pension power

To make a long story short, pension funds don't know what to do with your money. Pension funds around the world are desperate for yield and can not get it from government bonds, corporate bonds, investing in stocks or asset markets like real estate anymore. They're tapped out and are looking for riskier investments to the returns they promised their investors. 

They looked to venture funds who had an appetite for risk and would do the work in finding startups and as the capital came in these guys went to work.

## The exit strategy 

VC's would identify early-stage companies and give them cash for a piece of equity and encourage them to grow their business aggressively. It keeps funding these businesses until they make themselves look good enough so that other investors would want to get in. 

Once a more prominent VC gets in or an institutional investor, the first VC exits, sells the equity at a markup, takes their fees and thinks they're the shit. The pension fund then gets greedy and wants them to repeat the start of the Ponzi miracle because they're getting the yield they need /promised investors. 

All we're seeing is one private equity holder selling the bag to another for an inflated price, hoping to eventually get the startup to IPO and dump it on retail investors. The problem is a lot of these startups don't make it that far, and when the boomers start to retire in their droves and pull their pensions, the startups are going to feel the pinch and some pension funds are going to be stuck holding the bag for yield that will never come and go bust.


## The self-sustaining startup

When the party is over we're going to have startups looking to bootstrap themselves into an income stream and living within their means, grinding out profit through sheer determination, will and ingenuity and who really wants that? Who wants competition when you can buy your way into the market with other peoples money? 

I say bring it on, may the excellent startup purge begin and we see who is left standing!

## Have your say

What do you good people of steem think? 

Holla at me in the comments! All my commenters I will now refer to as Jessie. Jessie is a good friend of mine, but Jessies got a girl, and I want to make her mine.

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

## Let's connect

If you liked this post sprinkle it with an upvote or resteem and if you don't already, consider following me @chekohler
![follow me](https://steemitimages.com/0x0/https://cdn.steemitimages.com/DQmSfrQD1Y3vNAfxKRxkEV9wpYcbbVEvqrJ5JcwhUKAhbv2/chekohler.gif)
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