Karan Sood

1/ The largest financial market in the world isn’t stocks or bonds. It’s derivatives. ~$600 trillion in size as this decade began. 6x world GDP. 3x global stocks and bonds combined. That scale exists for one reason: utility. Utility that is finally becoming accessible beyond institutions. For the rest of us. 🧵 (@BIS_org & @IMFNews).

1/ Wall Street and Silicon Valley are often described as opposites. One is slow, cautious, and rule-bound. The other is fast, disruptive, and impatient. Having built my career in both, I’ve come to a very different conclusion: They are not opposites. They are complements. 2/ In January 2021, something strange happened. A struggling video game retailer nearly broke a hedge fund… …and almost took down a Silicon Valley startup at the same time. 3/ On one side: Gabe Plotkin, founder of Melvin Capital. A career built on understanding risk. Betting against companies he believed were overvalued. 4/ On the other: Vlad Tenev, founder of Robinhood. A product built to democratize markets. Commission-free trading. Millions of new investors entering the system. 5/ Then came GameStop. Retail traders coordinated online. Short interest exceeded 100% of the float. The price exploded ~30x in weeks. A classic short squeeze—on steroids. 6/ For Melvin Capital, it was existential. Losses > 50%. A multi-billion dollar rescue. 7/ For Robinhood, the risk was different. Not market losses— but plumbing. Clearinghouses demanded billions in collateral overnight. They halted trading to survive. 8/ The narrative wrote itself: Wall Street = villains Silicon Valley = heroes But reality was more interesting. 9/ This wasn’t a battle of good vs bad. It was a collision between two systems built for different kinds of risk. 10/ Silicon Valley is optimized for: • Speed • Iteration • Reversible mistakes You can ship, learn, and try again. 11/ Wall Street is optimized for: • Resilience • Stability • Irreversible consequences Capital doesn’t reboot. Trust doesn’t reset. 12/ When those two systems intersect without understanding each other… You get friction. You get outrage. You get GameStop. 13/ Seen this way, GameStop wasn’t an anomaly. It was a stress-test. A preview of what happens when innovation outruns infrastructure. 14/ I don’t see this as an outsider. I started on a derivatives trading desk in New York. Then went to @ycombinator in Silicon Valley. I’ve lived in both worlds. 15/ My co-founder @jeffchanginvest followed the same path. The company we founded, @VestFinancial, exists because of that journey. Because we came to a simple realization: These worlds aren’t opposites. They are complements. 16/ Wall Street taught us: • Respect for risk • Market structure matters • Systems may break slowly, then all at once 17/ Silicon Valley taught us: • Start from first principles • Build what people actually want • Move fast—but learn faster 18/ Each of these cultures also has blind spots. Wall Street can optimize for distribution over utility. Silicon Valley can underestimate regulation and consequence. 19/ The real work is synthesis. Move fast where learning is cheap. Move carefully where mistakes are expensive. 20/ The future of investing won’t be built by choosing sides. It will be built by people who understand: • Technology • Markets • Regulation • Human behavior 21/ Wall Street and Silicon Valley are not rivals. They are two halves of the same system. And the most interesting things get built at the intersection. Full essay: vestfin.com/field-notes/post…