Why is Vivek Ramaswamy?

Understand who you are dealing with

It is under appreciated what a broad label “venture capital” is. You have everything from “we are an excuse for rich guys to hang out with interesting people” to “we build acquisition targets for GoogAmaMicroMeta” to “we intentionally lock up investments for 10y so you can pretend your pension fund is solvent”, and beyond. Somewhere on the spectrum is pharmaceutical development, where Vivek Ramaswamy made his money.

All of these have something in common. They pull gains in from the future by setting expectations of investors - a veritable time machine. The earlier you are in this process the more variance there is and the more vibe-driven you become. “A CEO who is in the top 0.1% of charisma” is a great investment at the bottom, regardless of what he is actually pitching, because you can say that in expectation whatever story he ends up telling future investors will be enough to cash you out at a premium. If his company pivots from NFT-ized Tamagotchis to genetically engineered pet dogs, you’ve invested in the ride, not the destination.

This is fundamentally a social process. So being able to identify trends and leap on top of them just as they get going is the fundamental skill, because a lot of the time the people you are in turn selling to, explicitly or implicitly via a higher valuation (which allows you to take higher management / carry fees) are looking for “a XYZ company” for their portfolio. Sorry, the Uber round is closed - is Sidecar okay? You’re talking your book constantly, promoting your companies - ideally it becomes a self-licking ice cream cone where other investors want in because they saw you invest first.

Of course to get the really good investments, you can’t be just a pot of dumb money (although that is a pitch some firms make - sometimes low-touch is attractive). You have connections, you can help with recruiting, you know attorneys and accountants, you know greybeards who ran into a similar problem way back in ‘15.

And a huge portion of this social process generally happens in drips and drabs, one relatively short meeting at a time for what amounts to mutual vibe checks.

This is a little bit different in pharma, Vivek’s stomping grounds, but not by a terrible amount - you’re selling the idea that you have a team and an approach that can usher a certain kind of molecule through clinical trials, as opposed to a certain kind of SaaS product or what have you through acquisition or IPO. At various times he has been on the buy side and sell side of these arrangements, to great success.

So how does this translate into politics, and what are the implications for Vivek’s presidential campaign?

If you were one of the twenty or so people to actually watch the GOP presidential primary debates, you might notice an absurd charisma gap between Vivek and his peers - the impression being given is that with the exception of his position on importing his extended family, he “gets it” (something like understanding the depth of American structural rot and the deep unimpressiveness of his compatriots on stage) in a way that the others don’t. This impression is not an accident. Conveying that you “get it” is a core VC skill, on both sides - translating it from one-on-one retail encounters to mass media is itself a skill, but it leverages the underlying ability to sum-up, to make a representative point, to ask a rhetorical question that actually clarifies. The issues he talks about are essentially MAGA-lite right wing populism - the trend being chased, not metaphysically different from noticing people sure are on their phones a lot and drawing the appropriate conclusions about how that plays out.

This isn’t to say Vivek is not an impressive guy. It’s not to say he isn’t sincere (or for that matter the reverse). It’s just to point out there are at a minimum hundreds of executives just like him, who could do the same bit. VC / private equity / investment firms are replete with them. It’s not uncommon for random Fortune 500 companies to have a few tucked away. At the higher levels you are likely to receive coaching on these skills that is better than the modal politician has access to.

Mostly they do not go into politics because it is a thankless job with a humiliating failure pattern, usually less day-to-day personal power than they already have, and a weird backloaded compensation structure that requires you do semi-compromising stuff like pretend your wife is a real estate genius. The result is that when they do run, it’s often the result of incredible narcisism, or as a favor for a machine. The smart way to do it is to take a swing at the big pinata and aim for an executive appointment, rather than trying to grind your way through an actual campaign for Senate or some other booby prize. Not coincidentally, this is precisely Vivek’s approach. If it works, maybe there will be more.

A better governing system would more effectively use talent from the “private sector” (a dichotomy that is itself a sign of deep problems), so that holding office or an appointment would have an obvious payoff of general appeal, rather than painting a target on one’s back or raising questions about what precise arrangements had been made under the table. Nevertheless, in our situation you work with what you have. Hopefully Trump can make good use of him.