Big venture capital firms have recently been in the hot seat over their decision to invest in FTX and Sam Bankman-Fried—bets that turned out to be worth $0. Due diligence, or lack thereof, has come further into focus amid the FTX disaster, but some VCs saw warning signs in Bankman-Fried’s companies years ago—and decided not to invest altogether.
One such investor was even what Bankman-Fried described in a 2020 tweet as a “horror story.” My colleague Luisa Beltran recently spoke with that VC, Alexander Pack, managing partner of Hack.VC, who told her that he met Bankman-Fried in 2018 while he was at his previous firm (which he cofounded) Dragonfly Capital, an early-stage investor in blockchain companies. It was shortly after Bankman-Fried launched his ill-fated quantitative trading firm Alameda Research, and Pack was in discussions to become the firm’s first institutional capital, meeting with execs at Alameda including Bankman-Fried over a dozen times in the course of a five-to-six month span from 2018 to 2019.
