I've raised from angels in Vancouver. There is definitely a VSE hangover culture there. During the grind I had some strange experiences.
One involved an argument with the prospective investor over the share price. In their view it had to be between 20 and 50 cents. They didn't care about the valuation, or typical investment terms, only the share price.
Another invited us to an IPO party for another company they invested in (TSX if I remember correctly). At this party we learned that the company that IPO'd had less than 100k revenue (and huge losses). They were out of business within 3 years.
I guess it is hard for old dogs to learn new tricks... They made their millions off pump and dumps in VSE days and just didn't stop playing those games even long after the exchange shut down.
Even though the exchange has become the TSX Venture exchange, Vancouver remains the centre for junior mining companies, of the sort where scams are common.
I used to work in Downtown Vancouver and would on occasion get my haircut at a downtown barber frequented by office workers all around, and those barbers were a wealth of knowledge about the latest gossip from shifty junior miners and whatever they were into, which was increasingly not mining, but trendy startups.
Funny thing was when I was working in the area mining was going through a bit of a downturn, so a lot of the junior miners were shifting into other hot things they could fundraise for, like cannabis and crypto. From scam to scam to scam.
I stopped working downtown so stopped getting the gossip but I presume they swiftly pivoted to NFTs and onto whatever flakey thing they could still dubiously attach a .ai domain to.
I just happened to be going through every stock in the TSX from smallest market cap to largest. Many of the stocks at the bottom were mining companies that started with some huge spike then faded into nothing for the next N years until the current state of what seems to be basically dead.
I assume you’re referring to crypto mining, but the mental image of handlebar-mustachioed ore miners gossiping in Vancouver barber shops about how to scam investors with their shaft-digging operations is quite hilarious to think about! Pickaxes must be left at the door after the Incident.
My first thought was ore mining before crypto mining. I think I've recovered from the days of crypto induced mania where every other article on Hackernews was cryptocurrency related.
This is new to me, it probably was a scam, but the part about
Investors lose 84% of their money some of the time and all of it 40% of the time
is meaningless. This could easily be true for many venture investments, which is how this exchange is presented. High risk investment is not the same as a scam.
There is a real difference though. Individual investments might lose all their money but as an aggregate VCs make money by investing in dozens or hundreds of companies. No VC is losing all their money across all their investments but that's what this article is claiming happened to investors on VSE.
When I started at Goldman Sachs, I was told early on of an "Israeli discount" and "Canadian discount"; that is, investors were more skeptical of companies based in those countries.
I was not told of any more details than that at the time, but I now wonder if the VSE contributed to this?
To some extent, you see a similar dynamic happening on the ASX (Australian Stock Exchange) to this day. Plenty of mining companies that purchase the rights to explore for resources in some African territory with questionable governance concerns that serve as shells for directors to cash in fees. Lots of biotechs with similar track records there too.
The saying still holds, a mine is a hole in the ground with a liar standing next to it.
On the topic of low-quality investments, there should be a posting rule that HN submissions consist of text, not pictures of text, so readers can search for additional information by copying text, not images.
Nothing is more frustrating than an image-based PDF masquerading as text, especially now that, with little time or effort, OCR can convert most images into text documents.
It's not my site but I'm the one who posted it here. The nice thing about a scan (if it's good quality) for an old article like this is it viscerally provides some context (eg: the era and type of publication). The scan quality here is abysmal, and for that I do apologize.
as someone blind, there is one more reason to consider image based pdf-s undesirable. OCR works okayish most of the time, but it tends to suck when it does not and if the layout of the scanned page is complex, the output often breaks down. Not to mention that the friction of converting it is a disincentive to bother.
There is, sort of, but it's a constitutional quirk. Securities regulation is, for weird historical reasons, a matter of provincial jurisdiction; past Federal governments have said "hey look this is stupid let's just merge the regulators so we can do one good job instead of 10 bad jobs" but politics got in the way.
If the US SEC were replaced by 50 per-state SECs, you'd probably see Alaska or Wyoming becoming the scam capitals because they lack the resources to properly regulate.
I've raised from angels in Vancouver. There is definitely a VSE hangover culture there. During the grind I had some strange experiences.
One involved an argument with the prospective investor over the share price. In their view it had to be between 20 and 50 cents. They didn't care about the valuation, or typical investment terms, only the share price.
Another invited us to an IPO party for another company they invested in (TSX if I remember correctly). At this party we learned that the company that IPO'd had less than 100k revenue (and huge losses). They were out of business within 3 years.
I guess it is hard for old dogs to learn new tricks... They made their millions off pump and dumps in VSE days and just didn't stop playing those games even long after the exchange shut down.
It wasn't shut down. It's now the TSX Venture Exchange.
That explains a lot...
Sounds like the crypto world.
Even though the exchange has become the TSX Venture exchange, Vancouver remains the centre for junior mining companies, of the sort where scams are common.
I used to work in Downtown Vancouver and would on occasion get my haircut at a downtown barber frequented by office workers all around, and those barbers were a wealth of knowledge about the latest gossip from shifty junior miners and whatever they were into, which was increasingly not mining, but trendy startups.
Funny thing was when I was working in the area mining was going through a bit of a downturn, so a lot of the junior miners were shifting into other hot things they could fundraise for, like cannabis and crypto. From scam to scam to scam.
I stopped working downtown so stopped getting the gossip but I presume they swiftly pivoted to NFTs and onto whatever flakey thing they could still dubiously attach a .ai domain to.
I just happened to be going through every stock in the TSX from smallest market cap to largest. Many of the stocks at the bottom were mining companies that started with some huge spike then faded into nothing for the next N years until the current state of what seems to be basically dead.
I assume you’re referring to crypto mining, but the mental image of handlebar-mustachioed ore miners gossiping in Vancouver barber shops about how to scam investors with their shaft-digging operations is quite hilarious to think about! Pickaxes must be left at the door after the Incident.
He’s actually talking about guys banging on rocks looking for gold. So to speak.
My dad is involved in junior mining projects (geology, not gpu), and, yep, Vancouver is where you go to find these sorts of things, legitimate or not.
My first thought was ore mining before crypto mining. I think I've recovered from the days of crypto induced mania where every other article on Hackernews was cryptocurrency related.
This is new to me, it probably was a scam, but the part about
is meaningless. This could easily be true for many venture investments, which is how this exchange is presented. High risk investment is not the same as a scam.There is a real difference though. Individual investments might lose all their money but as an aggregate VCs make money by investing in dozens or hundreds of companies. No VC is losing all their money across all their investments but that's what this article is claiming happened to investors on VSE.
When I started at Goldman Sachs, I was told early on of an "Israeli discount" and "Canadian discount"; that is, investors were more skeptical of companies based in those countries.
I was not told of any more details than that at the time, but I now wonder if the VSE contributed to this?
In the latter case, yes. Israel is because reasonable geopolitical doubts.
Reminds me of small mining exploration companies in Australia's ASX. Most only exist to pay for the directors' lifestyles.
How does that work? Is there anything you can point me to where I can read more about this?
I, naively, would have assumed that publicly listing your company would be anathema if you're up to sketchy shenanigans.
Isn’t there this whole weird economy of empty pink sheet companies that just act as lifestyle funding for people?
My Dad lost my college fund in the 1980s investing in the gold mining penny-stocks on the VSE. Fun times.
My dad lost my sibling's college fund in the dotcom bust! Some things never change..
1989. The good old days, before blue-sky scams went mainstream.
Low listing standards means all the frauds and trash will congregate there. The AIM market in the UK has a similar reputation.
To some extent, you see a similar dynamic happening on the ASX (Australian Stock Exchange) to this day. Plenty of mining companies that purchase the rights to explore for resources in some African territory with questionable governance concerns that serve as shells for directors to cash in fees. Lots of biotechs with similar track records there too.
The saying still holds, a mine is a hole in the ground with a liar standing next to it.
On the topic of low-quality investments, there should be a posting rule that HN submissions consist of text, not pictures of text, so readers can search for additional information by copying text, not images.
Nothing is more frustrating than an image-based PDF masquerading as text, especially now that, with little time or effort, OCR can convert most images into text documents.
It's not my site but I'm the one who posted it here. The nice thing about a scan (if it's good quality) for an old article like this is it viscerally provides some context (eg: the era and type of publication). The scan quality here is abysmal, and for that I do apologize.
as someone blind, there is one more reason to consider image based pdf-s undesirable. OCR works okayish most of the time, but it tends to suck when it does not and if the layout of the scanned page is complex, the output often breaks down. Not to mention that the friction of converting it is a disincentive to bother.
Vancouver still functions at least as sketchy plumbing for the US financial system
I don't think there is any regulator quirk or shielding from doing it up there, people up there just do it
regulator quirk
There is, sort of, but it's a constitutional quirk. Securities regulation is, for weird historical reasons, a matter of provincial jurisdiction; past Federal governments have said "hey look this is stupid let's just merge the regulators so we can do one good job instead of 10 bad jobs" but politics got in the way.
If the US SEC were replaced by 50 per-state SECs, you'd probably see Alaska or Wyoming becoming the scam capitals because they lack the resources to properly regulate.